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Home My WebLink About2017-04-06 - Ad Hoc Citizens Advisory Committee Meeting Agenda Packet AGENDA YORBA LINDA WATER DISTRICT CITIZENS ADVISORY COMMITTEE MEETING Thursday, April 6, 2017, 6:00 PM 1717 E Miraloma Ave, Placentia CA 92870 1. CALL TO ORDER 2. ROLL CALL 3. PUBLIC COMMENTS Any individual wishing to address the committee is requested to identify themselves and state the matter on which they wish to comment. If the matter is on this agenda, the committee Chair will recognize the individual for their comment when the item is considered. No action will be taken on matters not listed on this agenda. Comments are limited to matters of public interest and matters within the jurisdiction of the Water District. Comments are limited to three minutes. 4. DISCUSSION ITEMS This portion of the agenda is for matters such as technical presentations, drafts of proposed policies, or similar items for which staff is seeking the advice and counsel of the Committee members. This portion of the agenda may also include items for information only. 4.1. Inland Empire Utilities Agency Rate Structure 5. ACTION CALENDAR This portion of the agenda is for items where staff presentations and committee discussions are needed prior to formal committee action. 5.1. Review of Minutes from Meetings Held March 8, March 21, and March 30, 2017 Recommendation: That the Committee review the minutes and provide requested revisions to the Facilitator. 6. DISCUSSION ITEMS CONTINUED 6.1. Budget Reconciliation for FY 2015/16 and FY 2016/17 Year to Date 6.2. Overview of District's Financial Reserves Policy 6.3. Future Meeting Schedule and Agenda Items 7. ADJOURNMENT 7.1. The next Ad Hoc Citizens Advisory Committee meeting will be held Thursday, April 13, 2017 at 6:00 p.m. Items Distributed to the Committee Less Than 72 Hours Prior to the Meeting Pursuant to Government Code section 54957.5, non-exempt public records that relate to open session agenda items and are distributed to a majority of the Committee less than seventy-two (72) hours prior to the meeting will be available for public inspection in the lobby of the District’s business office located at 1717 E. Miraloma Avenue, Placentia, CA 92870, during regular business hours. When practical, these public records will also be made available on the District’s internet website accessible at http://www.ylwd.com/. Accommodations for the Disabled Any person may make a request for a disability-related modification or accommodation needed for that person to be able to participate in the public meeting by telephoning the Executive Secretary at 714-701-3020, or writing to Yorba Linda Water District, P.O. Box 309, Yorba Linda, CA 92885-0309. Requests must specify the nature of the disability and the type of accommodation requested. A telephone number or other contact information should be included so the District staff may discuss appropriate arrangements. Persons requesting a disability-related accommodation should make the request with adequate time before the meeting for the District to provide the requested accommodation. ITEM NO. 4.1 AGENDA REPORT Meeting Date: April 6, 2017 Subject:Inland Empire Utilities Agency Rate Structure ATTACHMENTS: Name:Description:Type: IEUA_Presentation.pdf Backup Material Backup Material IEUA_Presentation_Revised.pdf Revised Backup Material Distributed Less Than 72 Hours Prior to the Meeting Backup Material The & Water Rates "California water agencies lose $673 million due to drought:' Sac Bee, July 2016 "You ask us to save water then you raise our rates...we will vote you out:" typical voter " We may not have snow pack in 20 years due to Climate Change:' Felicia Marcus, Chair State Water Resources Control Board "Doing the some thing over and over again and expecting a different outcome, is the definition of insanity. Think differently." i PRESENTED BY: Tom Ash MEETING DATE: April 6, 2017 Topics •Getting Past “Why” (the rest is relatively easy) •“Change” is the hardest part •Change from What (Traditional Rate Design/Philosophy) •Why agencies lose fixed revenues? •How agencies solve the revenue/conservation and public relations dilemma •Opportunities Change is Happening… •Climate/State Legislation •Agency Business •Public Perception Law of Diffusion: “Why Change is Hard” The “New Normal” 2012 2013 2014 Califomia Statewide Mean Temperature Departure Jan-Dec 2A IL W 0.6 1900 1910 1920 1980 1910 19110 1966 1970 19a0 1990 2000 261D BW*Lna Do'*W6 t 1-year Running Mean WBelern Regional ❑oorlurCs rrom 1949 20M ease PariW NOIR Cnmele Caner Linear Trend 1x96-present +1.6g t 0,42°F1166yr Linear Trend 1949-pragent +2.79 t 1:0U°FH Wyr Linear Trend 1970-pMeent + 3-81 t 224°F1166yr Warmsm Year 59.41F(+3,3 T)in 2014 MEAN 56.1°F Coldest Year 53.8°F(•2.5°F)In 1911 970EV 0.87T Jan-D@e 2014 59A (+3.3T) RANK 120 al 120 legislation 3 Predominant Rate Structure Designs: (1) Revenue Sufficiency, (2) Drive Efficient Use, (3) Be Equitable to All Inclining Tiers Individualized Tiers Uniform -Same rate for all water used -No economic signal for efficient use -No education or incentive to use water efficiently -Low use customers subsidize high users -Fixed tiers (arbitrary all0cations) -No efficiency target -Some incentive to use less water -Viewed as inequitable by end-users -Proportionate allocations -Clear efficiency target -Incentive & education to use water wisely 2015 2016 New Weather Normal Source: Public Policy Institute, 2016 The Drought You Don’t See Answer: Agencies provide reliable & safe water 12 $2/day / household $.003 / per gallon What do Water Agencies Really Do? Example of Financial Risk: Agency Budget: $100 million 70% Fixed /30% Variable $70 million /$30 million ________________________________________________________________________ @30% Fixed Fee: $21 million Fixed $$ in Variable rate: $49 million 70% Fixed Fee Recovered in Tiers $12 $12 $12 $12 10% Use Reduction = $4.9 mil loss Agency Budget: $100 million 70% Fixed /30% Variable $70 million /$30 million ________________________________________________________________________ @ 70% Fixed Fee: $49 million Fixed $$ in Variable rate: $21 million 30% Fixed Cost Recovered in Tiers $10.5 $10.5 10% Use Reduction = $525k 1991: 1st Water Budget Rate •Don’t lose money when less water is sold •Create a “conservation ethic” (efficiency for all customers all the time) •Be fair and equitable to customers •Get board re-elected “Sustainable” Rate Structure Fixed Charge/ System Cost Variable Charge/ Water Cost Fixed Charge/ System Cost 2. Allocations/Incentives Variable Charge 1. Cost Recovery Variable Charge/ Water Cost Revenues What Did the 1st Sustainable Rate Structure Look Like 4/10/14 5/09/14 1255 1337 82 CCF USAGE –INDOOR 16 1.48 $23.68 USAGE -OUTDOOR 23 2.64 $20.72 USAGE -INEFFICIENT 20 4.28 $85.60 USAGE -EXCESSIVE 19 8.56 $162.64 USAGE -ABUSIVE 4 11.10 $44.40 WATER SERVICE CHARGE $23.90 SEWER SERVICE CHARGE $16.90 YOUR ALLOCATION FOR THIS BILL 39 CCF BILL CALCULATION BASED ON .12 ACRES $377.84 Customer Level Data: -# of Residents -SF of landscape -Weather (ET) -Set “water budgets” for homes, businesses, landscapes and agriculture -Budgets changed with weather and could be adjusted for special needs -Individualized water budgets were imbedded in monthly water bills and rates What Did that Rate Structure Do? •Recovered revenue accurately and in a stable manner (regardless of weather, water use, drought, economy) •61% landscape use reduction •25% residential reduction •New funding mechanism for efficiency programs •85% Customer satisfaction •Reduced water runoff 0 10 20 30 40 50 60 70 80 90 IRWD’s water allocation process is fair I understand the rate structure 85% 85% 85% The water allocation process is fair I understand the IRWD’s rate structure A Great Story…? •“People now pay attention to leaks and water waste.” PWD •Agency cost recovery is right where we estimated even with significant water savings.” RCWD •“85% of our users meet the water efficiency standards.” MNWD •“We have 90%+ Customer Satisfaction.” IRWD •“We had a payback for the new rate structure implementation within 6 months.”WMWD WBR Implementations: •IRWD (1991) •Highlands Ranch, Co. (2003) •Castle Rock, Co. (2004) •Boulder, Co. (2007) •Palmdale WD, (2008) •Coachella Valley WD (2008) •Eastern Municipal WD, (2009) •City of Corona (2009) •Rancho California WD (2010) •Elsinore Valley MWD (2010) •El Toro WD (2010) •Monte Vista WD (2010) •Moulton Niguel WD (2011) •Western Municipal WD (2011) •East Valley WD (2015) •Las Virgenes MWD (2016) •Santa Margarita WD (2016) More Agencies Moving to Efficiency-based Rates SAWPA Rate Grant Agencies: City of Hemet City of Rialto City of Tustin City of Chino City of Chino Hills City of Garden Grove City of Santa Ana Cucamonga Valley WD City of San Jacinto City of Riverside The Myths about Water Budget Rates •It’s too hard •They take too much data •It costs too much •Customers won’t understand them •One size does not fit all •They are illegal Are Tiered Water Budget Rates Legal? Designed to meet the “Cost of Service” •Financial study •Model scenarios of cost recovery •Settle on the design that achieves the various agency goals with the least financial risk to the agency Designed to meet Prop 218 •Proportional to the parcel •Nexus between the rate per tier and the water source cost •Utilize State efficiency guidelines Predictable Failure of Rate Design “We see nothing in Article XIII, section 6, subdivision (b) (3) of the California Constitution that is incompatible with water agencies passing on the true cost of water to those consumers whose extra use of water forces water agencies to incur higher costs to supply that extra water.” Court of Appeal –4th District, April 20, 2015 How Water Budget Rates Align w/ State Legislation, User Needs, Science & Logic (# Residents) (55 gpcd) + (ET) (SF) (.80) (DF) = Water Budget (Reality + State Standard) + (Science + Reality + State Standard + Logic) = Win, Win May 9, 2016 Governor Executive Order (Permanent Efficiency Regulation) Water use targets [to be proposed Jan 2017] shall be customized to the unique conditions of each water agency, shall generate more statewide water conservation than existing requirements, and shall be based on strengthened standards for: a) Indoor residential per capita water use; b) Outdoor irrigation, in a manner that incorporates landscape area, local climate, and new satellite imagery data; c) Commercial, industrial, and institutional water use; and d) Water lost through leaks. Change is Happening… Efficiency-based Rate Structure… •Solves for the right questions –Revenue, Efficiency, Equity •Equity does take more data & more time •Model any scenario for revenue risk evaluation •Changes the relationship between the customer and water “We can’t use the same thinking that got us into this problem to get us out of the problem.” Topics • What must Rates Accomplish? • Incorrect Assumptions about Rate-making — Revenue Recovery, Proposition 218 and Proportionality • How Do Rates Happen? • What to Ask Up Front? • Why Change? • Why Do Agencies Lose Necessary Revenues When Water Consumption Goes Down? • What's the Risk to "Not Change"? • Change to What? • What to Expect/Allocating Costs? • Permanent Efficiency Regulations & Rates... • Opportunity! 66 SRVV_� A UmAlt Ei,vistewv What Must Rates Accomplish 1. Accurately and sufficiently recover the costs Of SePVICe (in order to provide reliable water service) 2 . Be fair and equitable to end-users (public acceptance) 3 . Meet VBPIOUS legislation (Prop 218, State Efficiency Targets, etc.) Incorrect Assumptions • Agencies Can Only Recover • Tiered or Water Budget Rates up-to 30% of Total Costs on are mcxi I, (San Juan Case): Fixed Charges CERTIFIED FOR PUBLICATION IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA • 1992 CUWCC Rate BMP (#11) FOURTH APPELLATE DISTRICT DIVISION THREE — Tied to State Grants a n d "While tiered, or inclined rates that go up progressively Loans in relation to usage are perfectly consonant with article XIII D, section 6, subdivision (b)(3), the tiers must still Legislation (AB 1420) Sunset correspond t to the actual cost of providing service at a in June 2016 given level of usage. [San Juan] did not try to calculate the cost of actually providing water at its various tier use — It was always a guideline with levels. It merely allocated all its costs among the price tier levels, based not on costs, but on predetermined an exemption usage budgets." "As we say numerous times in this opinion, tiered water rate structures and Proposition 218 are thoroughly compatible so long as those rates reflect the cost of service attributable to each parcel." "Neither the voters nor the Constitution say anything we can find that would prohibit tiered pricing." More on Prop 218 & Rates A Low Water User: Cost of Service/Proportionality: "Prop 218 protects lower than average users from having to pay rates that are above the cost of service for them..." • The amount of a fee imposed upon any parcel as an incident of property And, ownership shall not exceed the proportional cost of the service A High Water User: attributed to the parcel." "To the extent that certain customers over-utilize the resource, they Proportionality Defined : contribute disproportionally to the necessity for conservation, and the - Relative requirement that the District acquire new sources for the supply of domestic - Comparative water." - Equitable How Do Rates Happen ? • Tradition (Philosophy) • Agencies lost $673 • Consultants million in 2015/16 (Sac Bee; July 2016) • Fear of Change (Attitude) • Consultants design rates • Myths of Changing Rates based on : — "It's too hard" — What the client wants — "Takes too much data" — On inaccurate assumptions — "It costs too much" • Rate BMP of 30%/70% Split — "Customers won't • Tiered/WBR Rates are Illegal understand" — Guessing 0 Demand Forecasting What to Ask Up Front? 1. What are your fixed YLWD 75% of Costs are Fixed ( COStS? 2010) — Fixed Charge recovered 2. How much of your fixed 25/0 of Fixed Costs costs are recovered in — 75% of Fixed Costs your fixed charge? imbedded in the water rate Fixed Costs: Variable Costs: Operations Water Maintenance (miles of pipes/pumps, etc.) Energy Capital Improvements Treatment Debt Service Salaries/Benefits Environmental Compliance Reserves - .4 +* Y _ �f�ir;► t Memberships ��- ..._,.� � , tr-�;.mss; - 1_• Travelf � F.M Etc. - 7► 'i What do Water Agencies Really Do? MEWED ■NUNN i .. ..................................................................... $2/day / household $•003 / per gallon Revised Backup Material Distributed Less Than 72 Hours Prior to the Meeting Why Change ? 1 . Recover e costs of service (Reliability) Groundwater storage level 37°� roll Compared to 2 . Be fair and equitable t lonyeor: 185,996 ac-n +53.4°/0 (Public A • 1 3 . Meet State legislation * Permanent Efficiency Targets Required by the State 20 Precipitation ReoSAC4 �- 9 -,200 15 ■A6ove-average predpltaUon � zo ■6eiaw-average precipitation 10 3 900 950 1000 1050 310Q 115Q 1200 I Year 5 0 III li SII LL 5 -B llll zQ 1200 1250 tsoo trio 1aaQ tasQ 1s0o 1950 1960 1970 7980 1990 2000 2610 2015 veer 1500- 0 ?0 Temperature 3 4 LL ■A4ove-average remperawre 15oa 1 ssa 1 aoo t sso noa vso 3 aao ■Below-average temperature veer 2 l soo laso laoo leso z000 zoso zloo � •1- vear '2- Figrve 11. Recoastrvcted flows of Sacrarnento 12i�-er(SAC4),900-201 O CE. Horizontal line at xnedran.Color-shading marks longest nor and al]other runs greater than syecified length. -3 .. , 1950 1960 1970 1980 ,990 2004 2010 2015 Why did These Agencies C WBR Implementations: • IRWD (1991) 0 ""People now pay attention to • Highlands Ranch, Co. (2003) leaks and water waste." PWD • Castle Rock, Co. (2004) • Agency cost recovery is right • Boulder, Co. (2007) where we estimated even • Palmdale WD, (2008) with significant water • Coachella Valley WD (2008) savings." RCWD • Eastern Municipal WD, (2009) 0 ""85°o of our users meet the • City of Corona (2009) water efficiency standards." • Rancho California WD (2010) MNWD • Elsinore Valley MWD (2010) 0 "'We have 90°0+ Customer • EI Toro WD (2010) Satisfaction." IRWD • Monte Vista WD (2010) . 11 We had a payback for the • Moulton Niguel WD (2011) new rate structure • Western Municipal WD (2011) implementation within 6 • East Valley WD (2015) months."WMWD • Las Virgenes MWD (2016) • Santa Margarita WD (2016) Revised Backup Material Distributed Less Than 72 Hours Prior to the Meeting MK7M0= RESULTS PENALTY TIER DEFINITION Descriptions Consumption Revenues Reliable Rev Percentage of (AF) ($millions) ($million) Reliable Rev Tier 175% %(IB+OB) Service Charges $ 4.30 $ 4.30 37% INDOOR ALLOCATION INPUTS IB=Indoor Budget,OB= Outdoor Budget Tier 1 4,278 1.19 1.19 10% GPCD 60 gallons per capita day TIER MULTIPLIERS Tier 2 5,437 3.03 3.03 26% Size 3 persons (of Base Rate) Rates Tier 3 2,925 3.26 3.26 28% Tier 1 1.0 $0.64 Tier 2,293 5.11 MOUTDOOR ALLOCATION INPUTS Tier 2 2.0 $1.28 TOTAL 14,933 $ 16.90 $ 11.79 100% Tier 3 4.0 $2.56 Usage by Tiers under Proposed Water Budget of Bills g.0 $5.12 40% ET Adjustment Factor ]Q% %of ET Tier 40% ° 35% 35% Area Factor 45% %of Total Parcel Area ,c°� 30% 30% 25% 25% Base Rate $0.64 per ccf � 20°i° •: zo°i° Monthly U 15% 15% Monthly Usage Comparison Monthhly Bill Sample Monthly Bill Comparison e 10% 10% Usage 30 For Average usage,5/8-inch meter Bill ForAverage usage,5/8-inch meter Bill 5% 5% $60 0% 0% : Tier 1 Tier 2 ler Tier 4 25 $50 0=3%consumption 29% 36% 20% 15% — 35/0 29/0 21/0 : %Bills 16% ° ° ° 20 $40 - — %of Total Bills Percentage of Impacted Bills vs$Change in Bills : Impacted 15 $30 — — 60°io , 50% `.- 10 $20 — 40% — 30% 5 $10 — 20% $0 10% Budget Consumption Actual Consumption Water Budget Uniform Actual <$0 $0-5 $5-10 $10-25 $25-40 $40-50 $50-100 >$100 Consumption Consumption []Tier I ■Tier 2 Tier 3 ■Tier 4 ■Service Charge ■Tier 1 0 Tier 2 Tier 3 ■Tier 4 $Change in Bills Revised Backup Material Distributed Less Than 72 Hours Prior to the Meeting • • • • • • • • Monthly Bills under Different Scenarios $180 _ Usage 100 °/ of water budgets or 22 ccf $160 Scenario 1 FN = 75 / 2 $140 $120 Scenario 2 FN = 25 / 75 $100 $80 $60 $40 $20 $- - Scenario 1 Scenario 2 Palmdale (FN = 60/40) Palmdale Existing Rates ❑ Service charge ■ Water quality surcharge ❑ Elevation surcharge ❑ Tier 1 0 Tier 2 ❑ Tier 3 ❑ Tier 4 0 Tier 5 Revised Backup Material Distributed Less Than 72 Hours Prior to the Meeting Monthly Bills under Different Scenarios $180 Usa e 68.2 °/ f water bud ets or 15 ccf $160 Scenario 1 FN=75 /25 $140 $120 Scenario 2 FN=25 /75 $100 $80 $60 $40 $20 $- - Scenario 1 Scenario 2 Palmdale (FN=60/40) Pahndale Existing Rates e Service charge ■Water quality surcharge ❑Elevation surcharge ❑ Tier 1 ■ Tier 2 ❑Tier 3 ❑Tier 4 ■ Tier 5 Monthly Bills under Different Scenarios $18o Usa e 122.7 % f water bud ets or 27 ccf $160 Scenario 1 FN= 75 /25 $140 Scenario 2 FN=25 /75 $120 $100 $80 $60 $40 $20 $- Scenario 1 Scenario 2 Pahndale (FN=60/40) Palmdale Existing Rates ■ Service charge ■Water quality surcharge ❑Elevation surcharge ■Tier 1 0 Tier 2 ❑Tier 3 ❑Tier 4 0 Tier 5 The Risk of Changing M,M MO Elm �Mwe Agency Budget: $100 million Agency Budget: $100 million /0% rlpxCu / 30% variame / U% rumu / 30% variame $70 million / $30 million $70 million / $30 million 30% Fixed Charge: P21 million 70% Fixed Charge: P49 million Fixed $$ in wiame rate: $49 millio Fixed $$ in variawe rate: $21 million iXed ger Rates ate ° rc`I based R ° F 70/ Fixed Charge E{��c�e 30% Fixed Cost Recovered in Tiers Recovered in Tiers $12.5 $12.5 $12.5 $12.5 $8.5 $12.5 10% Use Reduction = $4.9 mil loss 10% Use Reduction = $525k Change To What ? ( Match Agency Business Model w/ Rates) Uniform • • - • Tiers Tiers - Same rate for all water used - No economic signal for efficient use - Fixed tiers (arbitrary - No education or allocations) incentive to use - No efficiency target water efficiently - Some incentive to use - Proportionate - Low use customers less water allocations subsidize high users - Viewed as inequitable - Clear efficiency target by end-users - Incentive & education to use water wisely Conservation vs Efficiency - - Home GPCD Target = 115 gpcd W s f S• `� • 12 CCF/Month 75gp cd (33%\,) t • 25 CCF's/155 gpcd j,4% T) ti ti 14` • gpcd 39 CCF's/243 cd '211% - • 26 CCF's/162 gpcd '40% T) k F 3 - f, (# of Residents) (55 gpcd) + (ET) (Landscape Area) (.80) = Water Budget What Did the 1St Sustainable Rate Structure Look like 4/10/10 5/09/10 1255 1337 CCF USAGE - INDOOR 1 .48 $23.68 USAGE - OUTDOOR 2.64 $20.72 USAGE - INEFFICIENT 20 4.28 $85.60 USAGE - �XCESSNF 1 %-7 .,..,j $162.64 USAGE - ABUSIVE 4 71 .70 $44.40 WATER SERVICE CHARGE $23.90 SEWER SERVICE CHARGE $16.90 YOUR ALLOCATION FOR THIS BILL 39 CCF BILL CALCULATION BASED ON ,12.. ACRES. Jan Feb Mar Apr May Jun Jul Aug Sep W Nov Oac IIndoor AllocafloR Lanftcape Allocation--&--TctM Allocalion—Aictuall Usage I What Did that Rate Structure Do ? 0 Recovered revenue accurately and in a stable manner (regardless of 90 85% 85° weather, water use, drought, economy) 80 61% landscape use reduction 70 25% residential reduction 60 New funding mechanism for 50 efficiency programs 40 85% Customer satisfaction (1997) 30 Reduced water runoff 20 10 0 The water I understand the allocation rate structure process is fair Revised Backup Material Distributed Less Than 72 Hours Prior to the Meeting Agencies Moving to Efficiency- based SAWPA Rate Grant Agencies: City of Hemet Retail Water Agencies in the Santa Ana River Watershed Using Budget Based Rates for Some or all of their Customers of R • r , City of tltl ®� bJ mo F rens I• Wate,,�istii2t of Chino of Chino Hills 4yJ as m • E stern Municipal water oismn F7•a"�"' .';f;; Western Municipal of Garden Grove � _ wafer oietrmc s r.'=r.: na.m�mr _® W I DI 1 e� our p f� ElS nor V li y of H� ® Mun'c alWt �'sb ct Santa . EI Tora paeme oeeaa waiarolatrin Cucamonga City of San Jacinto City of Riverside Example of Water Bill Impact w Budget-based Rates City of Chino Rate Study Analysis: • 80% of City Residential parcels already meet efficiency targets = No Bill Impact • 86% of dedicated irrigation parcels over-water = Bill Impacts SinglePro'ected Cost Increase <0% 5% 10% >10% . Commercial • . 5.4% • Rate Structure data will become the information needed to report and comply with State water efficiency regulation in the near future Source: City of Chino Rate Study (# of Residents) (55 gpcd) + (ET) (Landscape Area) (.80) Revised Backup Material Distributed Less Than 72 Hours Prior to the Meeting Indoor Allocation $0.345 $1.633 $0 $0 $1.978 / hcf Outdoor Allocation $0.345 $1.96 $0 $0 $2.306 / hcf Tier 3 Inefficient $2.549 $0 $0 $0.30 $2.849 / hcf Tier 4 Wasteful $2.549 $0 $1.275 $0.60 $4.424 / hcf Tier 5 Unsustainable $2.549 $0 $1.275 $1.49 $5.314 / hcf Permanent State Efficiency Regulations Water use targets shall be customized to the unique conditions of each water agency, shall generate more statewide water conservation than existing requirements, and shall be based on strengthened standards for: a) Indoor residential per capita water use; b) Outdoor irrigation, in a manner that incorporates landscape area, local climate, and satellite imagery data; c) Commercial, industrial, and institutional water use; and d) Water lost through leaks. EfficiencyTargetJ Projection (Aggregated for each agency) Indoor Allocation Outdoor Allocation (SBX7-7, 2009) (MWELO, 2007) (# Residents) (55gpcd) + (ET) (SF of Landscape) (.80) = Water Use Target ILI ...s„.», Rate Structure Process Process: 1. Staff evaluation 2. Development of landscape SAWPA Grant square footage data 3. Cost of service/rate study 4. Board direction to staff 5. Staff training 6. Billing system upgrade 7. Policy review 8. Board review 9. Public outreach (education) 10. Testing the " billing system" 11. Public Hearing/Prop. 218 12. SAWPA to reimburse agency costs up to $215K 23 Opportunities • Consider a rate philosophy that can address Revenue Stability, Fairness & Efficiency • Develop a partnership between end-users and the agency to provide parcel by parcel allocations • SAWPA will have more grant funds for agencies to deploy efficiency-based rates • California Data Collaborative (CaDC) will have a rate modeling tool available for member agencies : Bottom line on Efficiency- based Rates • Solves for the right questions «ARS Revenue Equity, Efficiency $a 5 CIE14CE • Equity does take more data & more time • "You can't manage what you can't measure" • Model any scenario for revenue risk • Changes the relationship between the customer and the agency (Ex: No more day-ot-week water restrictions, leak credits, etc.) • Change is happening...stay ahead ,� Y�bl,ew�-s W�tln Gain,wDt SOUVe OUY, W� �� W6 USO VTI e tm Salle tll,vo ,vv crew ted tIn ewe• �� ITEM NO. 5.1 AGENDA REPORT Meeting Date: April 6, 2017 Subject:Review of Minutes from Meetings Held March 8, March 21, and March 30, 2017 STAFF RECOMMENDATION: That the Committee review the minutes and provide requested revisions to the Facilitator. ATTACHMENTS: Name:Description:Type: 2017-03-08_-_Minutes_-_AHCAC.docx Minutes Minutes 2017-03-21_-_Minutes_-_AHCAC.docx Minutes Minutes 2017-03-30_-_Minutes_-_AHCAC.docx Minutes Minutes Minutes of the Ad Hoc Citizens Advisory Committee Meeting Held March 8, 2017 at 6:00 p.m. 1 MINUTES OF THE YORBA LINDA WATER DISTRICT AD HOC CITIZENS ADVISORY COMMITTEE MEETING Wednesday, March 8, 2017, 6:00 p.m. 1717 E Miraloma Ave, Placentia CA 92870 1. CALL TO ORDER The March 8, 2017 meeting of the Yorba Linda Water District’s Ad Hoc Citizens Advisory Committee was called to order at 6:00 p.m. The meeting was held in the Training Room at the District’s Administration Building located at 1717 East Miraloma Avenue, Placentia California 92870. 2. ROLL CALL COMMITTEE MEMBERS PRESENT Dennis Anderson Fred Hebein Lindon Baker William Lawrence Jeff Decker Cristy Parker Kent Ebinger Kenneth Tam Terry Harris YLWD STAFF PRESENT Delia Lugo, Finance Manager Cindy Botts, Management Analyst Malissa Muttaraid, Public Affairs Representative OTHER ATTENDEES Brent Ives, Principal, BHI Management Consulting 3. PUBLIC COMMENTS None. 4. DISCUSSION ITEMS 4.1 Facilitator/Staff Introductions 4.2. Committee Member Introductions 4.3. Committee Roles, Responsibilities and Procedures Primary discussions surrounded the issue of the scope of the committee’s work and the true expectations of the Board. Opinion ranged from looking at rate levels to only considering and recommending rate structures or models or both. Minutes of the Ad Hoc Citizens Advisory Committee Meeting Held March 8, 2017 at 6:00 p.m. 2 Some committee members desired to examine District financial conditions, current rates and the basis for those rates to advise the Board on rate levels. Another member handed out tables from the District for the District’s 2015/16 budget year with specific questions. Other members were primarily interested in recommending rate structures and models. It was discussed and agreed that some information at a detailed level regarding District budgeting and finance could be presented by staff to allow for background for either or both tasks. 4.4. Future Agenda Items Committee agreed to ask staff to answer questions regarding questions on the following topics at the next meeting: FY 2015/16 budget table and specific questions. Fiscal reserves, their construct and any policies pertaining. The capital improvement program (CIP), how it is constructed and implemented as well as its basis and any policies pertaining. Discussion of cost of service. Debt policies. Committee also requested that staff from other agencies, who have previously experienced rate structure/model transitions, be allowed to address the committee in future meetings. One member, an employee of Inland Empire Utilities Authority mentioned that he knows of colleagues who would present on the subject. Las Virgenes Water District, Eastern Municipal Water District and Irvine Ranch Water District were also mentioned. These were to be contacted and scheduled for future meetings if possible. It was decided that all scope related items should remain until further guidance is received from the full District Board of Directors. The committee agreed that the full Board of Directors should be asked to clarify and better define the scope of work and expectations for the committee at its March 14, 2017 meeting. Staff indicated that they would evaluate placing that item for Board discussion at that meeting. 5. ADJOURNMENT 5.1. The meeting was adjourned at 8:00 p.m. The next Ad Hoc Citizens Advisory Committee meeting is scheduled to be held March 22, 2017 at 7:00 p.m. BI Minutes of the Ad Hoc Citizens Advisory Committee Meeting Held March 21, 2017 at 7:00 p.m. 1 MINUTES OF THE YORBA LINDA WATER DISTRICT AD HOC CITIZENS ADVISORY COMMITTEE MEETING Tuesday, March 21, 2016, 7:00 p.m. 1717 E Miraloma Ave, Placentia CA 92870 1. CALL TO ORDER The March 21, 2017 meeting of the Yorba Linda Water District’s Ad Hoc Citizens Advisory Committee was called to order at 7:00 p.m. The meeting was held in the Training Room at the District’s Administration Building located at 1717 East Miraloma Avenue, Placentia California 92870. 2. ROLL CALL COMMITTEE MEMBERS PRESENT Dennis Anderson Fred Hebein Lindon Baker Pamela Hymel Jeff Decker Ben Parker Kent Ebinger Cristy Parker Terry Harris Kenneth Tam YLWD DIRECTORS PRESENT YLWD STAFF PRESENT J. Wayne Miller, President Malissa Muttaraid, Public Affairs Representative Al Nederhood, Vice President OTHER ATTENDEES Andrew Gagen, General Counsel, Kidman Law LLP Brent Ives, Principal, BHI Management Consulting 3. PUBLIC COMMENTS None were offered at this time. 4. DISCUSSION ITEMS 4.1 Overview of Ralph M. Brown Act Mr. Andrew Gagen presented an overview of the Brown Act including how the committee should operate and publically notify its meetings. Also discussed were specific constraints for members’ off-line discussions, rules for interactions with the public during meetings, and the proper handling of email communications amongst committee members. The topic of forming sub-committees was then discussed, including applicable requirements should one or more be established. Minutes of the Ad Hoc Citizens Advisory Committee Meeting Held March 21, 2017 at 7:00 p.m. 2 Mr. Terry Harris made a motion, seconded by Mr. Kent Ebinger, to consider Item No. 4.5 at this time. The Committee agreed and the following item was taken out of order. 4.5. Clarification of Committee Roles, Responsibilities and Procedures President Miller addressed the committee and commented on its role and the District’s rates. He stated that the role of the committee was to tell the Board if the current uniform water rate structure was appropriate or if they considered a tiered rate structure to be fairer. Mr. Terry Harris added that while looking at rate structures was clearly the intent of the committee, this could not be accomplished without looking at some of the District’s financial data. Dr. Jeff Decker stated that the committee needed to go back to what the entire Board said, not only what the Chair wants to see. He asserted that the District’s past rate collections have overcharged the rate-payers. Mr. Kent Ebinger stated that the District has more than sufficient funds and believe that both Rate sufficiency and Rate structure are the role of the committee. Mr. Ben Parker asked how the committee would provide a report or recommendation. Following discussion it was decided that the committee would do its best to provide verbal and written recommendations to the full Board of Directors in May as requested. Adequate time for that deliverable was discussed with the outcome uncertain. Mr. Terry Harris stated that he didn’t think the Board gave the committee enough respect regarding their capability to understand rate structures and provide guidance in an informed and timely manner. Dr. Jeff Decker agreed to sit with appropriate staff, one on one to study his sufficiency questions, then report back to committee. This was decided to proceed by the committee and Dr. Decker agreed to provide his report in a 20 minute timeframe at the April 6, 2017 committee meeting. President Miller stated that this process took Las Virgenes Water District two years to study and complete. He continued that they were more strategic than tactical in their approach. Should that approach be applied to this committee, a June/July outcome from the committee would not be required. Ms. Pam Hymel stated that she thought having a facilitator was a bonus. Minutes of the Ad Hoc Citizens Advisory Committee Meeting Held March 21, 2017 at 7:00 p.m. 3 A member of the public stated that the committee could not look at one without the other (referring to rate sufficiency and structures or models). A member of the public asked what happened to the list of items requested at the March 8, 2017 meeting. The facilitator explained that staff had combined that request with answers at the recent workshops on two of the matters (Capital Improvement Plan and Reserves, 3/21 Board workshop) and the full Board considering the scope of the committee (3/14 Board meeting). A member of the public asked if there was a cost to changing rate structures. Committee answered that that will be part of the discovery process to come. President Miller suggested that the committee develop a “data gap” list. Mr. Lindon Baker recommended that two sub-committees be formed, one for each subject, rate sufficiency and rate structure. Following discussion, it was decided that in light of time constraints and the Brown act, committee members would perform research on an individual basis and report back to the full committee. 4.2. Discuss Continuation of Meeting Facilitation Services The committee discussed the merits and drawbacks of having a facilitator for its meetings, questions were asked of the facilitator. The question was put to the committee to vote yes to keep the facilitation of the meetings and no, to dismiss the facilitator. The vote was taken on index cards with the outcome 7 votes yes in favor of keeping the facilitator and 3 votes opposed to keeping the service. Action to ratify this decision will be placed on the March 30, 2017 agenda. 4.3. Consider Appointment of Committee Chair The committee discussed the need for a Chair. Ideas ranged from having two chairs, one for each topic (Rate Sufficiency and Rate Structure), and not having a chair at all. Committee reasoned that having one chair would be beneficial should the committee desire to meet on a date when the facilitator was not available. The committee unanimously determined to appoint Mr. Terry Harris as the Committee Chair. Action to ratify this decision will be placed on the March 30, 2017 agenda. Minutes of the Ad Hoc Citizens Advisory Committee Meeting Held March 21, 2017 at 7:00 p.m. 4 The committee then discussed the process for developing agendas in order to comply with the Brown Act, including the Chair’s involvement and staff time required for preparation and proper notification. It was also discussed that the Chair would review the minutes of past meetings prior to committee consideration for approval. 4.4. Consider Appointment of Committee Secretary There was no discussion of this matter. 4.6. Future Meeting Schedule and Agenda Items The committee discussed how to move specific informational items along for the committee’s benefit. The committee requested that the presentations being provided at the Board workshop meeting on March 22, 2017 be placed in the drop box. The committee determined that the next meeting would be held on Thursday, March 30, 2017 at 6:00 p.m. Staff was to work with IRWD and IEUA to provide the committee with presentations regarding their respective agencies rate structures. The committee agreed that Mr. Dennis Anderson would provide a presentation on Proposition 218 and the City of San Juan Capistrano’s water rate issue at the March 30, 2017 meeting. It was decided that time would be allowed for the development of key questions and the identification of data gaps in areas relevant to topics of interest. This would allow committee members more time to review current and new information in the drop box. Questions could be delivered to staff to answer at upcoming meetings. 5. ADJOURNMENT 5.1. The meeting was adjourned at 9:17 p.m. The next Ad Hoc Citizens Advisory Committee meeting is scheduled to be held Thursday, March 30, 2017 at 6:00 p.m. BI Minutes of the Ad Hoc Citizens Advisory Committee Meeting Held March 30, 2017 at 6:00 p.m. 1 MINUTES OF THE YORBA LINDA WATER DISTRICT AD HOC CITIZENS ADVISORY COMMITTEE MEETING Tuesday, March 30, 2016, 6:00 p.m. 1717 E Miraloma Ave, Placentia CA 92870 1. CALL TO ORDER The March 30, 2017 meeting of the Yorba Linda Water District’s Ad Hoc Citizens Advisory Committee was called to order at 6:00 p.m. The meeting was held in the Training Room at the District’s Administration Building located at 1717 East Miraloma Avenue, Placentia California 92870. 2. ROLL CALL COMMITTEE MEMBERS PRESENT Dennis Anderson Terry Harris Lindon Baker William Lawrence Jeff Decker Kenneth Tam Kent Ebinger YLWD STAFF PRESENT Delia Lugo, Finance Manager (Left at 6:36 p.m.) Cindy Botts, Water Consv Sup/Mgmt Analyst OTHER ATTENDEES Brent Ives, Principal, BHI Management Consulting (Facilitator) Fiona Sanchez, Director of Water Resources, Irvine Ranch Water District Christopher Smithson, Mgr of Strategic Planning and Analysis, Irvine Ranch Water District 3. PUBLIC COMMENTS None. 4. DISCUSSION ITEMS 4.1 Irvine Ranch Water District (IRWD) Rate Structure Ms. Fiona Sanchez and Mr. Christopher Smithson provided the committee with an overview of IRWD’s rate structure and responded to related questions. They both left the meeting following their presentation at 7:03 p.m. Minutes of the Ad Hoc Citizens Advisory Committee Meeting Held March 30, 2017 at 6:00 p.m. 2 5. ACTION CALENDAR 5.1 Continuation of Meeting Facilitation Services It was moved and seconded to continue with the services of the meeting facilitator. Motion carried unanimously. 5.2 Appointment of Committee Chair It was moved and seconded to appoint Mr. Terry Harris as the Committee Chair. Motion carried unanimously. 6. DISCUSS ITEMS CONTINUED 6.1 Overview of Proposition 218 Mr. Dennis Anderson provided a presentation regarding Propositions 218 and 26, litigation related to the City of San Juan Capistrano’s water rates, and the subsequent court ruling. Further discussion regarding these subjects followed. 6.2 5-Year Capital Improvement Plan and Financial Reserves Policy The Committee discussed the status of these topics and the process for obtaining additional information. Discussion followed regarding the current status of reserves. The Committee requested that staff be present at the April 6, 2017 meeting to discuss these two subjects. The Committee then discussed the basis for development of the capital improvement program and reserve amounts. 6.3 Future Meeting Schedule and Agenda Items An overview of Inland Empire Utilities Agency’s rate structure and reconciliation of the District’s FY 2015/16 and FY 2016/17 YTD budgets were slated for the April 6, 2017 meeting. A presentation regarding the District’s Capital Improvement Plan was proposed for the April 13, 2017 meeting. 7. ADJOURNMENT 7.1. The meeting was adjourned at 8:12 p.m. The next Ad Hoc Citizens Advisory Committee meeting is scheduled to be held Thursday, April 6, 2017 at 6:00 p.m. BI ITEM NO. 6.1 AGENDA REPORT Meeting Date: April 6, 2017 Subject:Budget Reconciliation for FY 2015/16 and FY 2016/17 Year to Date ATTACHMENTS: Name:Description:Type: Decker_Presentation.pdf Backup Material Distributed Less Than 72 Hours Prior to the Meeting Backup Material Backup Material Distributed Less Than 72 Hours Prior to the Meeting YLWD Reconciliation Budget to Actual 2015/16 and Budget to Plan Y-T-D 2016/17 Dr. Jeffrey N . Decker and Friends April 6, 2017 PROPOSED RESOLUTION Everyone agrees that YLWD must set its rates and charge its customers according to its cost of service. However YLWD's past practices have created a great deal of social angst, and the evidence that is presented here suggests that there are good reasons to be troubled. The most recent election validates this call for more transparency. It is also obvious, that YLWD must adopt a new way of managing its rates. The old way was much too costly to administer and was predicated on a now obsolete reality. In the past, YLWD generated excess reserves during dry years and depleted them during rainy ones. Sacramento's conservation mandates have put an end to this old rate model. The potential for more conservation mandates during dry years makes this system unacceptable. There is a simple solution to this conundrum. Charge rates sufficient to generate reserves in the wettest of years and issue rebates when appropriate. We recommend an annual review of results to plan, similar to the one used here, and adoption of an annual ratepayer refund system. The following set of slides show that YLWD has been recently charging its customers more than was necessary, especially in this historically wet year. Accordingly, we recommend refunds or credits for 2016 be provided to customers in the amount of $176 per household. YLWD is currently on a pace that will necessitate refunds for 2017 of $100 or more per household. Using this system of refunds will assure that YLWD operates in the black while not overcharging its customers. PRESENTED BY: Jeff Decker MEETING DATE: April 6, 2017 Backup Material Distributed Less Than 72 Hours Prior to the Meeting Prop 218 Edition District Proposes Rate Changes y GOVERNOR BROWN'S MANDATE FOR: ® Yorba Linda Water District r anSG..-.• - IM1�E ARE GOAL H6REl- y � 3pk r zax �- _ r� WATER f _� WW The Governor has ordered us to conserve and so far, we have. The financial effects of our great conservation efforts have been crippling to the District- The State mandates have blown a hole in the District's budget, to the tune of more than $9 Million. This Special Prop 218 Edition of Waterlines is aimed at explaining to our customers why we must move more of the average monthly water bill to the Basic Service Charge- In short, the proposed increase to the Basic Service Charge is directly tied to the lost revenue incurred from the State mandate. Immediately upon learning of this revenue loss, we contacted a professional financial consultant to develop a rate structure that prevents YLWD from defaulting on our bonds Still though, failure to implement the proposed rate changes to recover our cost of service puts the agency on the brink of bankruptcy. Should that happen, Yl-WD would be no more, and local control would be lost. As we continue to try to make good with the hand dealt to us by the State, we ask you to continue your conservation efforts, especially throughout the rest of this summer as our conservation mandate will be harder to achieve in the winter months ahead. We hope you understand that this proposed rate adjustment is far better than the alternative. We thank you for doing your part. L Backup Material Distributed Less Than 72 Hours Prior to the Meeting ] orrba Linda Water Di triCt ANNUAL GPFRA77NG BvDGETFfSCAL YFA 2of5l�fs Taal Revenue and Expenses (Water) A a:e 6:_ 2 -=.e FYE201A15 FY2015f16 - - Backup Material Distributed Less Than 72 Hours Prior to the Meeting FIVE YEAR RATE SCHEDULE MONTHLY CHARGES WITH YLWD APPROVED RATES Based on average costorner usage of 16 units per month iL water Use Charge $43.20 $43.24 $43.70• .30S43,20' $43-20 Month1 v Base Fee + $36.77+ $41.57 + $",84 $51.76 + $57.5+1 563.8# MordNV 5ewe 5erAce + 55-50+ S5.94+ $6.42 + $6.90 * S7.50 + $8.10 Total Current Char�� $65.4J $90.71 "am 10++" 1 7+1 '¢115.1# i ES4R1311�PJN$Ltnr4i:h Costs.krLai iZ m w be.r]�rmn@64A lAI*Q1S mm Year 1: Year 4: $25 X 24,000 X $5.78 X 24,000 X 12=$7,800,000 12=$1,664,640 Year 2: Year 5: $4.87 X 24,000 X $6.27 X 24,000 X 12=$1,402,560 12=$1,805,760 Year 3: $5.32 X 24,000 X 12=$1,532,160 At the end of these five years, YLWD would have increased its Annual Service Fees to $14,203,000. This is approximately 50% of the current total water budget without $.01 of cost justification for years 2 through 5. 4 Backup Material Distributed Less Than 72 Hours Prior to the Meeting REVtGED 17EM No-.R.i, xo-r4.und.5K11K�Irirle9 141,11E f rrfld Fnr Al .I�PWRr�3T,1417 r7Y1Gk J■ruw V ui,Rollfary YTO h1h 1T9 Y?UA=W - nwVmr Prim YM TMhclu6 I'MG Sudgel Akti� Acbm WROW)OW Jan Aditmt Actoop rry w 5ra _FY 2917 Fl n'9 T 1'MWrTo l F F i i_ J�rl !i>I F P dtr�# F7 ALI% F4F+r4nd�(�pare4r1o1: •- - -- .. . W.2wrReti-nue(Residendd5 - . 9,682 #�91,-03i �9,i42917 42W,166) 715,915 57563,#71 X980-06 7.53'!. Walor Rmonud(Gemmrrca l 6 FUS rat I 1,t'�,26� ,m,sm 1,,02,ZW WA+20 1M.167 1,01.797 54.4U 9.211E walm Rownut{Lwi35GaP@"@bwi 1,41111.941 75,875 2 255 M 441,601 117,I0 I.&YOU 60.20+I 33,E 4kalcRe.anenj6a�.rrCharVar 685+],47'1 9M= 5AF7-784 „2 17 1,f1B0,616 S Zf>34 ET5,1Sf , 115'1 DlhmrOpemlomgRkwen..e 3w 2a 37.iml 141-NK 1 1.4% _ t6O.P1# 1,T�j*1 (��S,b;R� -73.6514 TDM]OW&UnR FtdMerw& I27,d119 1.714-061f 17.012,395 36�, @ 1 ,iT# 17,374,30-0 '�3 Am TW khh,rlrx,�(hkn�pp+o*r�K Inrinhi 34,323 30.5" >'WARF 11ILM 33,413 17 .901 W 3a.3 1% E'I4vr+sr Tars MAW Yt.FI 403140 1; rna, 74" W.Ow 631.W 34714 4?1r+e'+Non-Opt'rkling Rawrllo! Sam-,_ S1 1-P6,Tt69,436 iiC3Jbrl r} 1 f9OIin 3ED 1-69-``W rn1�Non fOrwwMq Rcrvernr 1236.6M 211AtdC 1,311,743 72,442 --TM Q3 I-M-T '� �16ZU$'I) 22% Icdo1 Rffiy a 18,F95.= iA4L4r2 U=4569 07.10h rk;KINT '1LTN WC -CFFf EXOW1689{4.1C'erer'UJ: . VarvWcYlabffCoN''s(G_1N.,ter ry d Powa) k11 ,0W #72,129 TrTTT.22' 44117a4p 5W.SG 605.1 S1 1_712.M- i7.7#E4 Salary FmlNlad Egrrm 4.%I.,S3 57"1A 4,7151,461 (2ifo,67'11 %w.xm 4...296 7ryF.9r}1 8`97r CarnrruraLahms 124,74D 11,aO5 1D6.70 IIT19no 11,11'4 IMAM pl.E ) -2A00% r u-1rK*urrSxvnn 214,r43 41,4.11 24F.241 ip.!5"i 30,511 281,141 (M,346) -12.2m dnlll tlrar.WSMq 14..11101 1d.na 120.#37 cu.ua� D,290 14DAS1 (iv,41rp1 m.p% DLW,haMwrip,ralrt}& TLM 11"4 YOUS" (1)11df 2,f$3 F4m 3,0441 4.31M F"q i PWP NY IMAM elm 1943Q17 13t1#Ddl 2,41'7 07,76 11.77# 1�.DA4 041+4 E41CXA 14465 44= 11GJ73 {12, 123,477 - Ineirmcm 156,3A Topp 14000 115,226] 19,912 136 I'M 1, Moftn rs 4n,noY Si,E18 515-356 9-0.561 47-I#4 451,559 31.799 11.229E 111eb'U AjMLje&EWRee+allRm 15.7E,9 t4Pe 5-06 11p.� 40 6,1643 (98A4 -ts,811% hlarrtkronm 779,331 3A.1UT 1r17,244 142,144} 3,4110 192487 2AM 19l-1% Hnn-C-9pirallR►PFr=t 92. 19 T9,139 74429 417,W01 5.377 "is 27,9114 60.18% Of M fP:%Wwg 234 1 l.,ak rP ara (5.ZM21 2,308 2$565 14-wn -19 9e% F4 kwsimnES;er km 2Nr2S3 26,514 241 141 165,C6M 32.344 91100 (TV-01 ,23.71% Trdrkm dDA25 9,141 22,545 ofl. j 3,445 M= TOA47 719AN5% Trays i Cwdwvru s 6+_843 478 ;?&141 I#1,7p2] an 4.01H rm= $5R% Uft4fteIm4,owuffrla I@.5w 3,Z74 7.924 111,05M lalm ]a= ISAW 44.95% UtlM4a 47817 19,147 75M3 1,+ns 9,010 U.M on IOAIF% VOMOW Eq vvwt 1"V 12I.PM i 14 %11''14 9up�arlai 8 Err icrF$vI-TOW 3,641.1X14 , 16 69 Mille3.f9Y14 7QUI Omrwg214anYi f1ri525f1 1,9Q21T � 3 TG4,g1 f��1, +I¢I 1556,064 1376T,T1� 1,df8 25 1 - f +W+9W. Inkneelur-LmyTerrn lh--b1 1,-004.433 t3Dipi6 M367 (50.g1G) 13314!10 M.473 43F,11i] -&TT% Or FM rig 1$14yTi ?.445 1-4.7m I1 25;2w 3$.ii Zi ] . Tales Nu i--Qpvra4r�Capersm: 1,017�1Ir 1 IMM 991,-055 (59,744) - 73S6p4 ,,[t .307 OM 47.0-07. TmrErRRMtc lit 4711�T. ,�zas 7 MTAVO 1,#-0.074 1,PXk145 1.7ESAR? 0-42%. Flt rosftw Odom Ca"I coftwb rubor ter iM2a= -W.1111 Ce"ji Wn- eshr Trwmm* L 115.7w 4677110 401_110 - S2OM 4nM 13n.?n i3A=34 rsamphstal Hot prnli'm Oa(arR O*1FrIFF'MA+P T 3 t.00"T4 7g,iR:ylpr,6 arn4+'rrY� 9hi 6.70 Mao,1 'J,"Y9.�'} (7]4,?�F� a14,i]7 1;676:63! fa 47 Ci4` .6 AINL Ta1a1t1atPorlRlon tilnriJ01I _ 1�7T M7r#7'f�1M1� '!1- -rul.DwedLator (1i2M) 1136 76 (!1,8431 (tD9 57] (17A+H) S51lQyk YLWD reported a positive Net Position impact in January of $423,236 Backup Material Distributed Less Than 72 Hours Prior to the Meeting Yorba Linda Water District Water Fund For Period Ending February 28,2017 (With February 28,2416 for comparison purposes) YTD Feb YTD YTD Actual Prior Year Prior YTD YTD Actual YTO-CUR Budget Actual Actual (Under)Over Feb Actual Actual(thru vs vs FY 2017 FY 2017 FY 2017 YTD Budget FY 2416 Feb 2016) PY Actual PY Actual 9k Revenue(Operating): Water Reven ue(Residential) $9,230,345 $683,716 ;8,786,233 (444,113) $693,917 38,257,388 $528,845 6.40% Water Revenue(Commercial&Fire Det) 1,244,317 124,585 1,226,845 (17,472) 1135,714 1,143,511 83,334 7291% Water Reven ue(Landsca pe?Irrigation) 1,990,288 44,470 2,299,123 348,835 1131,264 1,796,713 542,410 27.96% Water Reven ue(Service Charge) 6,691,282 829,451 6,796,629 105,336 1,050,91D 6,342,941 453,679 7.15% Other Operating Revenue 411,769 37,604 519,308 107,538 129,522 1,917,073 (1,397,765) -72.91% Total Operating Revenue: I 19,588,1302 1,715,826 113,628,129 60,127 2,081,327 19,457,626 I 1710,543 0.86% Revenue(Non-Operating): Interest 66,667 21,207 190,094 123,427 18,512 142,413 $47,681 33.48% Property Tax 830,415 8,401 961,741 131,326 1,367 921,367 $413,374 4.38% Other Non-Operating Revenue 403,067 67,896 256,932 (146,134) 58,809 428,202 (171,270) -40.00% Total Nan-Operating Revenue: 1,300,148 97,504 1,408,767 108,619 78,6N 1,491,982 (83,215) 3.58% Total Revenue 20,868,160 1,813,334 71,036,896 168,746 2,160,015 20,949,608 87.286 0.42`/6 Expenses(Operating): Variable Water Costs(G.W.,Import 8 Power( 8,945,825 471,648 8,248,872 (896,953) 630,172 7,235,330 11,013,542 14.01% Salary Related Expenses 5,564,404 552,036 5,303,517 (260,887) 546,092 5,133,383 170,134 3.31% Supplies&Services: Communications 142,560 6,952 113,719 (28,841) 9,416 148,075 (34,356) -23.20% Contractual Services 319,7D7 35,319 282,560 (37,147) 42,113 323,699 (41,139) -12.71% Data Processing 163,567 38,541 159,092 (4,475) 9,823 149,674 9,418 629% Dues&Memberships 78,13134 1,251 74,620 (3,383) 437 70,740 3,8813 5.49% Fees&Permits 156,420 9,660 119,240 (37,180) 21,397 119,181 59 0.05% Board Election 152,520 - 120,873 (31,647] - - 120,873 Insurance 177,531 19,831 159,845 (17,685) 19,912 158,194 1,651 1.04% Materials 483,2108 70,539 583,697 100,669 58,559 5211,118 63,779 12.26% District Activities,Erin Recognition 18,011 646 5,852 (12,160) 496 6,687 (836) -12.50% Maintenance 262,163 38,443 225,639 (36,474) 30,108 192,770 32,919 17.08% Nan-Capital Equipment 105,576 %6,59 83,088 (22,488) 16,660 63,125 19,963 31.63% Office Expense 26,811 4,052 22,130 (4,681) 3,305 25,891 (3,761) -14.53% Professional Services 375,147 62,492 3135,683 (69,464) 71,647 3911,403 (84,72D) -21.70% Training 46,2100 7,872 31,418 (14,782) 1.609 14,937 16,481 110.34% Travel&Conferences 74,175 551 23,693 (50,482) 5,551 31,146 (7,453) -23.93% Uncollectible Accounts 21,7100 (130) 7,194 (14,506) 17,774 33,996 (26,602) -78.84% Utilities 77,5100 11,369 86,592 9,1193 7,756 78,481 10,111 13.22% Vehicle Equipment 215,277 12,896 179,085 (36,192) 26,971 193,559 (14,474) -7.46% Supplies&Services Sub-Total 2,696,075 328,763 2,584,270 (311,805) 343,336 2,516,676 65,595 2.60% Total Operating Expenses 17,406,305 1,352,447 0,136,659 (1,269,646) 1,519,6W 14,887,389 1,249,271 8.39% Expenses(Non-Operating): Interest on Long Term Debt 1,147,923 1310,618 1,076,970 C710,9S3) 133,9810 1,117,454 (40,484) 3.62% Other Expense 15,333 9,041 23,744 8,410 785 39,708 (15,964) -4020% Total Non-Operating Expenses: 1,163,256 139,659 1,100,714 (62,542) 134,765 1,157,162 (56,443) -4.88% Total Expenses18,5fi9,561 1,492,106 17,237,373 (1,332,186) 1,654,36}5 16,044,550 1,192,823 7.43% Net Position Before Capital Contributions 2,296,589 ,321,224 73 99,x023 1,600,934 505,649 4,906,057 (1,105,535) 22.5496 Capital Contributions(Non-Cash Transaction 94,990 562,700 562,7013 71,962 1 D4,6DS 458,096 437.93% GASB 34 Compliant) Net Position Before Depreciation 2,298,689 416,214 4,362,223 2,063,634 577,611 5,009,662 (64T,439) -12.92% Depreciation&Amortization 4,132,286 484,212 3,863,742 (268,546) 514,799 4,141,428 (277,686) 3.71% Total Net Position (1,833,699) (67,998) 496,481 2,332,180 62,613 668,234 (369,754) -42.5936 YLWD reported a positive Net Position impact in February of $321,224 Backup Material Distributed Less Than 72 Hours Prior to the Meeting 2015/ 16 Reconciliation Yorba Linda Water Charge 2014/15 Actual 2015/16 Budget 2015/16 Actual (Page 5, Column 4) (Page 5, Column 5) (Page 6, Column 3) Water Residential �,i�,909,458 $11,472,028 $12,522,617 Water Commercial 1,941,531 113851979 1,711,104 Water Landscape 4,203,144 ) 2,7821183 21700,775 Service Charges 4,988,739 I 9,426,652 10,886,142 Other Revenues 11237,953 (?) I 3,5�9 7,z�z Non-Op Revenues 2,075,230 I 2,075,230 2,633,236 Total Revenues $28,280,826 $28,539,833 $30,453,874 I Variable Water Costs 3,850,950 I $12,080,410 $10,467,374 Amount YLWD Customers Were Overcharged $3,527,077 Overstatement of Other Cost Salary Expenses = $500,605 Operating Expense = $200,000 All. Total Amount Due YLWD Rate Payers = $4P227,682- 2015/16 Revenues Water Costs Households Each Actual_>$30,453,874 Plan $12,080,410 Plan $28,539,833 Actual -� $10,467,374 Overcharge $1,914,041 + $1,613,036=$3,527,077 Salary Cost Savings $500,605 Favorable Operating Cost Variances + $200,000 $4,227,682 24,000 = $176 Backup Material Distributed Less Than 72 Hours Prior to the Meeting Yorba Linda Water District Water Fund For Period Ending June 30,2016 Annual YTD YTD YTD Budget Budget Actual Under(Over) `---_A FY 2016 FY 2016 FY 2016 FY Budget =- Revenue(Operating): Water Revenue(Residential) x11,472,028 $11,472,028 $12,522,617 (1,050,589) Water Revenue(Commercial 8.Fire Det_) 1,385,979 1,385,979 1,711,104 {325,125) --_-- Water Revenue(Landscapellrrigation) 2,782,183 2,782,183 2,700,775 81,408 Water Revenue(Service Charge) 10,824,413 10,824,413 10,886,142 (61,729) as e Other Operating Revenue 3,556,678 3.556.678 2,396,206 960,473 " Total Operating Revenue: 30,021,281 30,021,281 30,41t},8a4 {395,563) ----- Revenue _ Revenue(Non-Qperating): Interest 85,0DO 65,000 265,006 {180,D(16) 311-®=a. Property Tax I.395,0DO 1,395,000 1,615,454 {220,454) 115_8u Other Non-Operating Revenue 5 ,230 595,230 7523776 {157,546) 12.6A7% Total Non-Operating Revenue: 22075:230 2,1075,230 2,633,236 {556,DG6) 126.89¢ Total Revenue =8,511 32,096,511 33,050,080 (953,5691 102.97% Expenses{Operating): Variable Water Costs(G_W., Import&Power) D- 12,080,410 10,467,374 1,613,x36 86.6 Salary Related Expenses - -- 8,118,352 7,617,747 500,605 96--.-.- Supplies&Services: Communications - 284,232 208,295 71,938 74 Contractual Services 545,124 494,685 50,439 90_- Data Processing _= - 279,461 210,246 69,215 75.2: Quer&Memberships 106,773 73,585 33,188 68.c, Fees& Permits - 2.718.622 211.364 2;507,438 7.7 Insurance 253,596 238,391 15,205 94_0 Materials 690,479 774,083 (83,604) 112." DistrictAcdvities,EmpRecognition ----- 27,072 7,888 19,184 29--- Maintenance = --= 445,647 338,712 106,935 76-0 Nan-Capital Equipment �338 148,336 146,659 1,679 98_& Office Expense =___= 39,851 38,385 1,466 PrafessinnalServices 494,350 627,452 {133,102} 126-9 Training 67,718 23,863 43,855 35.2= -. Travel&Conferences e_= 88,406 45,877 42,529 51.= Uri Dollectible Accounts 37,200 61,639 (24,439) 16t_P_. Utilities 83,700 79,116 4,584 Vehicle Equipment 3 304,328 312,630 (12,302) 1 Supplies&Services Sub-Total 6-607='F7 6,607,097 3,892,890 2;714,207 58.92% Total Operating Expenses 26305,859 26,805,859 21,978,011 4,827,848 81-9 r% Expenses{Non-Operating): Interest on Long Term Debt 1,655,665 1,655,685 1,671,539 (15,1354) Other Expense 22,000 22,000 970 21,03+0 Total Non-Operating Expenses: 1,677,685 1,677,685 1,672,509 5,176 e Total Expenses 26,483,544 28,483,544 23,650,620 4,833,024 - -- Net Income(Lass) Before Capital Contributions 3,612,967 3,612,967 9,399,560 f`, 766,5931 260.16% Capital Contributions - - 347,795 347,795 Net Income(Lass) Before Depreciation 3,612,967 3,612,967 9,747,355 f!E�438,7981 Depreciation&Amortization 6,003,400 6,003,400 6,181,174 {177,774) _ -- Total Het Inoorne (Loss) {$2,390,4331 ($2,394,433) $3,866,181 [$6,956,6141 :- CBDital�Direct Labor (195.7831 Backup Material Distributed Less Than 72 Hours Prior to the Meeting 2016/ 17 YTD Reconciliation 1. January and February had net positive contributions totaling over $700,000. 2. Y-T-D YLWD's Net Position exceeds plan by $1,500,934. 3. Y-T-D revenues through February 2017 exceed plan by $168,000. 4. Y-T-D Salary Relate Expenses through February 2017 are below plan by $260,887, but they exceed 2016 (Y-T-D) by $170,134 (3%). 5. Y-T-D Variable water costs are below plan by $696,953. However, Y-T-D 2017 is $950,140 higher than Y-T-D 2016 (42% of revenues vs. 37% of revenues). 6. Y-T-D interest charges are below plan by $70,953. 7. Y-T-D Total Operating Expenses are below plan by $1,269,646, but $1,249,270 higher than last year. 8. By year end, YLWD's Net Position will exceed plan by more than $2,500,000. Perhaps more, once we understand what is going on with water charges. 9. This projects to a refund of $100 per household or more. Backup Material Distributed Less Than 72 Hours Prior to the Meeting 11dence Rites CID i 18 leducel r ialtonow Informing the public one post at a time. hV ChI11111 me loom In the municipal elecfion West VaHey Water District guts Rates& Approves Rebates of November 3, 2015, 18 voters of the West Valley Z N Water District in 4Comments San Bernadino County changed the majority of the Board of Directors by t. _► efecfingmembers who were responsible to In a post to the Bloomington MAC Facebook Group newly elected Board Member, ratepayers. Gre907YOM9 munced that the board had voted to reduce rate payers rates and rebate the money they saw as excessive,Here is his statement; in January of this year, "I am pleased to Introduce my new. a�er rneetikg report on uhat actions were takent e newly elected Board this even' newsui11 be doing this fur every meeting I am at in the future. The knot only rescinded fr°m f4n01s meeik , that rescihdthe schedtr Nat�Ing run to repeat these increases I am so previous rate increases, also dto hone fu1fi11ed my prom, to you to stop theca increases Additlona so gated unan2mousy to rebate back toyou[he Increases rom 2015, use they approved customer f f ��bignlght far YOU the ratepayers of the district. rebates! Backup Material Distributed Less Than 72 Hours Prior to the Meeting G A L l F O A N t It 14.Can i bring in my check to the WVWD office and credit it to my account? = r*6tLdtio 1 �**�**777777Water District _ ■ Yes,the full amount of the check will be applied and+if this results in an . - average or credit balance,the remainder will apply to the future balance. Kora• About WVWD Deparm"ts Jho:rd of riireploxs 11.Am I eligible for a refund,if I have a balance on my account? Ya.,are here: Home x departments } Water Rebate&Rate Rollback ■ Yes,if you have an active account with us. If your account is closed or in 201.6 collection, the rebate will be applied tothe balance first and any Water Rebate&Rate Rollback 3016 remaining rebate will be issued to you. 13.Why is the 2015 rate being maintained when I'm getting back those manies?Why isn't the rate rolled back to 2014? rveuri ' u _ ■ The District has studied carefully its financial position and, in order to WWr provide safe, reliable water service,the 2015 rates will remain in of-e€t. i i l t i { 13.Will the refund be reflected an my physical and online account t �� ' ' — statements? 1 ■ N-D,the rebates will be issued through special correspondence from the ROTE 1. 1 1 i District. r i _CK 14.Why were rates raised in the first place?Why did WVWD 201 1 _ ` .. overcharge me in 2015? r 0- y_ ■ When the District made the determination to raise rates in december 2012 a financial study by Kennedyllenks Consulting forecast a shortfall Good News West Valley Water Distri cit Customers! between revenue and expenditures, so a schedule of incremental The aoard of Directors for west Valley water District(WVWD) has refunded a increases was approved.A recently-completed Anancial study for 2017- portion of your 2015 water payments and has rescinded the 2016 and 2617 2021 irid i€ates that the 2016 and 2017 rate increases were unne€essary, rate increases approved in 2012-Customers should have received refunds by and that a portion of payments made in 2015 could be refunded and the May 1, 2016. The District takes seriously its obligation to be responsible fiscal District would still remain in sound fiscal standing. stewards and provide water at a reasonable cast. Frequently Asked Questions=FAQ's 15.What do I do if my check was last,,stolen,destroyed,or I haven't 1, What's the amount of the refund I'm fletting? received my check after Hay Ist? * On average customers will he rebated about 1106 dependent upon their ' please fill out the Check Rebate Claim Form and a replacement check will usage in 20I5. be issued within is days or it will be applied to your water account. 2. How are the refunds being €al€ulated? (Cneck Rebate Claim Form click here) * depending on how long you have been a customer,your consumption and haw much you paid in Tiers 1, 2&3, you will receive a setter that explains the method we used to calculate your rebate. QUESTIONS FROM THE COMHl1NITY MEETINGS FEBRUARY 29-MARCH 3. bo I have to file a claim or complete any paperwork to receive 16, 2016 the refund?Is there a time limit to file for the refund? 1,I heard that the City of Rialto issued€hecks to its customers that * No action is required an your part.The District is computing the rebates are significantly higher khan WVWD's.Why is that? and they will be issued no later than May 1, 2016- ■ The MWD rebate is from the revenue collected by the District in 2015 41, When can I expect to receive the refund? and not related to settlement issues in the Rialto area for perchlorate. + The Dlsbridt experts all refunds to be made by May 1, 21]16, 2,Why has my bill been the same for the last few months? S. When can 1 start checking an the status of my refund? ■ Your bill is based on your usage,the number of days in the billing cycle * If you haven't received your rebate by May 1, please call(9m)820-3700. and the service charge.Congratulations on being so consistent and 6. Haw will I receive the refund? paying attention tb your usage. * You will receive a letter with an explanation at your mailinwbilling 3.If my landscaping is part of the street's beautification would I need address with the check. to check with the city before replacement? 7. What i I I suspect my check has been Ins[or stolen? ■ Yes * Customers who are concerned they have not received their rebate wreck 4.Does the District have a rebate for rain barrels? can call aur customer service for assistance at(909)820-3700. We have a process in plane to help customers determine if their check has been processed ■ ND, but this is being considered for future im plementation- 8. Why am I receiving a refund? 5,What Turf Replacement program does the District have? * The District's current financial study,from 2617-2021,determined that the previously apprave•rd fate increases Far 2016 and 2017 were ■ please click hereto lea more about cur Turf Replacement Rebate. unnecessary, and that payments made for a portion of 2615 could be returned to consumers and the Distna would be in sound financial condition. Backup Material Distributed Less Than 72 Hours Prior to the Meeting ] orrba Linda Water D i tri Ct ANNUAL GPFRA 77NG BuDGET FISCAL YEAR 20f 5/16 Taal Revenue and Expenses (Water) t ITEM NO. 6.2 AGENDA REPORT Meeting Date: April 6, 2017 Subject:Overview of District's Financial Reserves Policy ATTACHMENTS: Name:Description:Type: YLWD_Reserves_Policy.pdf Backup Material Backup Material Reserve_Policy_Presentation.pdf Backup Material Distributed Less Than 72 Hours Prior to the Meeting Backup Material RESOLUTION NO. 16-08 EXHIBIT A FINANCIAL RESERVES POLICY A. GENERAL POLICY: Maintaining adequate reserves is an essential part of sound financial management. The Yorba Linda Water District Board of Directors realizes the importance of reserves in providing reliable service to its customers, financing of long-term capital projects and funding availability for emergencies should the need arise. Interest derived from reserve balances shall be credited to the reserve account from which it was earned. B. CATEGORIES: YLWD shall accumulate, maintain and segregate its reserve funds into the following categories: Restricted and Designated Reserves 1 . Board Designated Reserves; and 2. Contractually Restricted Reserves. C. SCOPE: This policy will assist the Board of Directors in establishing: 1 . Target levels for reserve funds; 2. Requirements for the use of reserve funds; and 3. Periodic review requirements for each reserve. D. PERIODIC REVIEW: Staff and the YLWD Board shall review the reserve balances and targets annually as a part of the annual budget process. The Finance Staff will continue to review all reserve and investment balances monthly, with a quarterly report going to the full Board. E. RESTRICTED AND DESIGNATED RESERVES: 1 . Board Designated Reserves: These are reserve funds earmarked for the purpose of funding such items as new capital facilities, repair or replacement of existing facilities and general operating reserves designated for a specific purpose and use by the Board of Directors. Adopted June 23,2016 Page 1 of 4 1.0 Operating Reserve A. Definition and Purpose— Established to cover temporary cash flow deficiencies that occur as a result of timing differences between the receipt of operating revenue and expenditure requirements and unexpected expenditures occurring as a result of doing business. B. Target Level — The Government Finance Officers Association (GFOA) recommends that funding should be no less than one to two months (or 8% - 17%) of the District's annual operating budget. The District's current target will be a minimum of 8% and a maximum of 17% of the annual operating budget for both the water and sewer funds. C. Events or Conditions Prompting the Use of the Operating Reserve — This reserve may be utilized as needed to pay outstanding operating expenditures prior to the receipt of anticipated operating revenues. 1.1 Emergency Reserve A. Definition and Purpose — Established to provide protection recovery to the District and its customers for losses arising from an unplanned event or circumstance. The reserve level combined with YLWD's existing insurance policies should adequately protect YLWD and its customers in the event of a loss. B. Target Level — Established at a minimum level equal to $1,000,000 for the water fund and shall accumulate interest and annual contributions as determined by the District's annual operation to a maximum level of 4,000,000. The target for sewer will be a minimum of $250,000 and a maximum of$1,000,000. C. Events or Conditions Prompting the Use of the Emergency Reserve — This reserve shall be utilized to cover unexpected losses experienced by the District as a result of a disaster or other unexpected loss. Any reimbursement received by the District from insurance companies as a result of a submitted claim shall be deposited back into the reserve as replenishment for the loss. 1.2 Capital Replacement Reserve A. Definition and Purpose— Established to provide capital repair and replacement funding as the District's infrastructure deteriorates over its expected useful life. B. Target Level — The Board-approved 2010 Asset Management Plan recommended that the annual contribution to this reserve be at a minimum level of$1,820,000 for the water fund and $345,000 for the sewer fund, less money Adopted June 23,2016 Page 2 of 4 set aside for the Maintenance Reserve. Funding with available funds based on the District's operations shall be allocated quarterly. C. Events or Conditions Prompting the Use of the Capital Replacement Reserve Through the annual budget process, staff shall recommend anticipated asset replacement projects. The Board of Directors shall take action to approve recommended project appropriations from the capital replacement reserve. Should unplanned replacement be necessary during any fiscal year, the Board of Directors may take action to amend the budget and appropriate needed funds as required. 1.3 Maintenance Reserve A. Definition and Purpose — Established to provide funding for non-scheduled capital asset repair and replacement. B. Target Level — $200,000 subject to an annual review. C. Events or Conditions Prompting the Use of the Maintenance Replacement Reserve — Unplanned failure of assets including but not limited to pumps, motors and major facility repairs. 1.4 Debt Service Reserve A. Definition and Purpose — Established to provide funding for semi-annually scheduled debt service payments. B. Target Level — The District's highest annual debt service payment — currently 2,723,509. C. Events or Conditions Prompting the Use of the Debt Service Reserve — Semi- annual debt service payments will be made out of this fund, with funding on the water rate replenishing the fund annually. 1.5 Employee Liabilities Reserve A. Definition and Purpose—The purpose is to cover employees' accrued vacation and other compensatory time and to ensure the complete funding associated with the liability incurred for employees whom have met the requirements necessary for district paid health benefits at retirement. B. Target Level —The annual contribution will be $100,000 ($93,000 for water and 7,000 for sewer) to be evaluated and/or adjusted annually thereafter based on an analysis of current employees' vacation and sick time accrued and actuarial determinations of future retiree costs. As of July 1 , 2015, an actuary determined that the District's Other Post Employment Benefit (OPEB) liability Adopted June 23,2016 Page 3 of 4 was $2,136,644. When combined with a liability on the District's books for vacation, compensatory and sick time of $1 ,204,595 at June 30, 2015, the target is projected to be approximately $3,341,239 for the combined water and sewer enterprises. C. Events or Conditions Prompting the Use of the Employee Liabilities Reserve — This reserve may be used in the event that operating funds are not adequate to meet vacation, compensatory and sick time paid out or retiree medical cost obligations within the current year. 1.6 Conservation Reserve A. Definition and Purpose — Established to provide funding for district-wide conservation efforts. B. Target Level — Funding shall be established as the net result of administrative penalties assessed less allowed expenditures of each fiscal year. C. Events or Conditions Prompting the Use of the Conservation Reserve — This reserve may be used to fund district-wide conservation efforts in relation to, but not limited to, salary and related, maintenance, and material expenses for leak detection, conservation efforts, and other allowable expenses outside the normal cost of service for each fiscal year. 2. Contractually Restricted Reserves: These are funds held to satisfy limitations set by external requirements established by creditors, grant agencies or law. Examples include stipulated bond covenants and reserves held with a fiscal agent. 2.0 US Bank 2008 COP Reserve A. Definition and Purpose — Established to cover reserve requirements held with a designated fiscal agent (US Bank) for the 2008 Certificates of Participation. B. Target Level — Funding shall be held in an amount equal to $2,147,096. C. Events or Conditions Prompting the Use of the Contractually Restricted Reserve — This reserve may be utilized as needed by the fiscal agent to pay any outstanding debt service payments not covered by the District within the specified billing and due dates. End of Policy Document Adopted June 23,2016 Page 4 of 4 Backup Material Distributed Less Than 72 Hours Prior to the Meeting Yorba Linda sir waver vlisvrl ct AHCAC Mof April 6, 2017 Presented By: Delia Lugo, Finance Manager Cindy Botts, Management Analyst Backup Material Distributed Less Than 72 Hours Prior to the Meeting V1 Vim~ � T. Y • Reserve Policv Backup Material Distributed Less Than 72 Hours Prior to the Meeting Overview �. • Reserves - A A - _ _ t of pi de mane-0.planning. rA -�� _ exists to ens ger d'y' _has_ uuffi�ie _ current and future nee s by setting reserve target levels of funding. • Reserve Fund Type.;.. - General Operating - Funds that accumulate from day-to-day operations that have not otherwise been designated or restricted. - Designated Reserves - Established by action of the Board and designated for specific purposes. These funds are utilized to fund future such things as capital facilities, repair and replacement of existing assets, economic uncertainties, local disasters and other financial hardships in the local or state economy. - Restricted Reserves - Restrictions on the use of the funds are imposed by an outside source such as creditors, grantors, laws or regulations governing use. Backup Material Distributed Less Than 72 Hours Prior to the Meeting Purpose ,� � • Provides a era I frdhnt� at ju s "9§49,_ A y i- W=1 a rig - - ' ,•,�. _ environments . • Establishes policy objectives that build adequate reserves to provide sufficient liquidity to withstand economic and operational fluctuations . • Should not be seen as " surplus " funds, but necessary the short- and long-term operation of an agency. (2005 ACWA Policy Principals for Reserve Funds) Backup Material Distributed Less Than 72 Hours Prior to the Meeting Target Levels • Recomme oto hc - - - imum - ad- t hr h en-,cd reserve levels . - Ensures an agency will meet the Reserve Policy requirements - Assures the rating agencies there will be an adequate amount of savings for possible emergencies or operational and capital fluctuations Backup Material Distributed Less Than 72 Hours Prior to the Meeting Rating Agencies • Credit rats -=a. enciel-aOo v ri - _ ' ve tdrge�-- c c n c FmG - _ - Support current operating, capital and debt service needs - Provide additional financial flexibility, especially during emergency situations. Backup Material Distributed Less Than 72 Hours Prior to the Meeting Rating Agencies • Durin a " r _eview ol '� :� e " ,- they = , _�. g . - ,e n c '�-sa to o -a t � - finances and evaluate the reserve levels - To determine if the active Reserve Policy is being adhered to and that liquidity needs can be met. • Adequate reserves directly affect an agency ' s bond rating , and ultimately its ability to borrow money at affordable interest rates . - Ensures the ability to finance and construct infrastructure necessary to improve existing systems and expand service levels to meet future needs. Backup Material Distributed Less Than 72 Hours Prior to the Meeting YLWD Unrestricted Reserve Types YLWD- yteco _. in I Target Target Min Target Operating Reserve Water 8%of O&M 17%of O&M 25%of O&M 25%of O&M 50%of O&M Sewer 8%of O&M 17%of O&M 25%of O&M 25%of O&M 50%of O&M Emergency Reserve 1% Net Position of 3% Net Positon of Water $1,000,000 $4,000,000 $10,000,000 capital costs capital costs 1% Net Position of 3%Net Positon of Sewer $250,000 $1,000,000 $3,000,000 capital costs capital costs Capital Replacement Reserve 2%assetvalue at At least 2 years of Water $1,820,000 Repl a cement Costs $1,820,000 CIP Budget 2%asset value at At least 2 years of Sewer $350,000 Repl a cement Costs $345,000 CIP Budget Maintenance Reserve Water $200,000 $200,000 $200,000 $300,000 Sewer $0 $0 $100,000 $300,000 Administration Reserve Water $0 $0 $200,000 Rate Stabilization Reserve Water $0 15%Commodity Revenues 20%of Budgeted Water Sales Debt Service Reserve Wate r $2,723,509 $2,723,509 $0 Backup Material Distributed Less Than 72 Hours Prior to the Meeting YLWD Restricted Reserve Types �.: YLWD- RF RecommendQ4- y ——" in Target Target Min Target Conservation Reserve Wate r $1,500,000 $0 $1,000,000 2008 COP Debt Service Reserve Wate r $2,147,096 $2,147,096 $0 Employee Liability Reserve-Annual Contribution Wate r $93,000 $93,000 $93,000 Sewer 1 $7,000 $7,000 $7,000 Backup Material Distributed Less Than 72 Hours Prior to the Meeting Days of Cash - Rating Agency Requirements -�a _ to AA+ - AA- to as . �.,r�],�••=`- -- _ ~_` �, � _vim `�'�. <150>9 5ays <90>60 S&P Cash Balance > Cash Balance < Cash Balance < $75M $75M>$20M $20M>$5M Aaa Aa A 250 days >_N >150 150 days >_ N > 35 - Moody's Days > 250 days days Strong Midrange Weaker Fitch Days >_ 365 Approx 6 Months 3 Months or Less *N= Cash on Hand, "Days of Cash" is only one component of Rate Result Backup Material Distributed Less Than 72 Hours Prior to the Meeting Days of Cash - Policy Comparison Fieldman Current Recommended Policy Unrestricted Reserve Balance $29,781,704 $26,585,928 Water FY 2016/17 Budgeted O&M Expense $25,803,499 $25,803,499 Calculated Days Cash 421 376 Unrestricted Reserve Balance $1,354,750 $4,3361406 Sewer FY 2016/17 Budgeted O&M Expense $1,598,830 $1,598,830 Calculated Days Cash 309 990 Fieldman Recommended based on FY 2016-17 Budget and June 30, 2016 CAFR results. Current Policy based on January 31 , 2017 reserve balances. Backup Material Distributed Less Than 72 Hours Prior to the Meeting V1 V� Qu est*io ns / Dussio n OTHER MATERIALS SUBMITTED DURING THE MEETING F1'* Y LW D n n r, son ■ o odeting• Am# P rq n 1 n • L !0 ; 21 I _ IRI A 2p ri 170• 1 MATERIALS SUBMITTED BY: Al Nederhood MEETING DATE: April 6, 2017 Outline is i . r§ Pcti, yp 3 . 15 / 1 � A� � w � �� 4 � 1 X11 7 Pr�� p, ipn 5 . L X11 IR50 ? 11y ,3g e Mpdel 78 qping Foryygr� Basic Assuml2ti* ons . * Best for YILWD * Good intentions *Accept the Numbers Audited &r Legal Record Benefit of the Doubt " Help me understand . . . . Vote "YES" on the Recall Bride of CFrankenstein Linda Frankenstein r DistriCt ANNUAL OPERATING BUDGET FISCAL Y Budget Water &Sewer} FY 2015!16 FYE 2015116 FY 201017 AetuM Ae1ua1 Budget Forecast 16ud*1e lOPer.1 gl r Revenue[Resdemall S 17502293 S 15461.640 S 11.471.028 S 12,412,726 S 13,907.406 r Revemfe iComme, al 6 Fae Del I S 1,986,096 f 1.913 712 S 1,365,979 f 1,710.564 S 1.874.818 Water Revenue(Lands�hrgallonl S 4,543,942 $ 4,068.308 $ 2.782,183 $ 2,700.775 $ 2.998,777 Se-oe Charges S 4.341.965 f 5,012.966 S 9.426.652 S 10.559.242 S 10.038,923 Sewer Charge Revenue S 1.565,548 S 1.582.067 S 1581348 S 1,669.166 S 1,ffi2,831 Sewer P S 201,054 $ 193.615 S 20150O $ 178,742 S 198,40LCharee O0 S 1 047 825 $ 1,4611 03 S 3,592,969 $ 2,654, BB9 S Total Operating Revenue 3 31.188,523 f 29.683,397 S 30.445.658 S 31,6&5.906 S 31,523,96Re-.-JNon-Opwwm,)l Interest S 145.048 3 187,316 3 93.000 S 247.350 S 115.00Property Tax S 1.394,722 $ 1A96.489 S 1.395.000 $ 1.593.548 : 1.450.Other Non-Operating Revenue f 1,325,886 $ 744.572 S 607,155 $ 734.473 f 818,TN.1 Non-Operalmq Revenue f 2.8655.455 S 2.428.377 S2.095.155 S 2.575.371 S 2.181.Toter Revenue S 34.051,97a $ 32,111,774 j 32,540.813 S 34,461.275 S 33.705.51 E"an rOperaing} Vafable Costs Waler-Related Costs S 12,532,484 S 9,471.717 j 9,111,465 f 7.727,491 j 10,575.305 F.wd Costs S 982,728 S 1279.711 S L565.541 S L53L226 S 1,475.751 Power-Refeled Costs S 1.157.932 $ 1.482.334 S 1,403,404 S 1.90.388 S 1,128.422 Varable Water Costs Related E"nses Tdal S 14.873,144 $ 12.733.762 S 12.090.410 S 10.349,107 S 13.179.477 salar, t S 7.529.481 $ 7778,763 S 8.870,465 S 8,426.450 S 9,108.277 5 -Lmteo-term Staff 5 S S 226.753 S 297.629 S 355.346 Reduthpn for Caplal Pro?"Labor S $ 3 L135000) $ (207.8931 S [210,000) Salary Related EVernes Total $ 7,529.481 S 7-776.783 $ 8.964218 $ 8,516.186 3 9.253.623 Supplies 8 serwas C-cauors f 204,063 S 301.525 S 202.463 $ 258,925 C 4601.129 S 585.155 S 486.575 S 558.265 Data Processing 177.740 3 233,829 5 223,556 S 283.709 Does 613emiwship $3 Million 73.915 $ 115,110 $ 78.527 S 95.785 Fees 6 Permes" 2.926.665 5 193,053 $ 251 A25 Bdard ElecWr, - 5 $ 246. Ftsurar>ee Over Charge 1,760 $ 296.340 S 256.334 S 286. $1 Millen Materials 693.065 S 795.950 S 783.940 S 819 Dlstraa Anmhes,E 1fi.249 $ 29.110 S &779 f 2 1.bmtenanee 523.557 S 747.345 5 427,954 f Over Charge Nm-Cap"Equpnrerll S 184,726 $ 157.750 $ 155.926 $ 195 Office E.perne 5 49285 S 42.850 5 34.699 S 43. 532,699 5 448.130 $ 644.710 5 608.192 S 598. Training S 34,071 5 47.728 S 75.915 5 25.107 S T7.005 Travel 6 Conferences S 29,453 S 34618 S 98.480 S 44,5% $ 124.985 ui�olecvble Aceoirds $ 29,632 5 14.26 S 40.000 S 68.699 S 35,000 Uulnies S 38,201 5 77.400 S 90,850 $ 74.561 $ 125.800 Vennpe Er�peertse5 S 409.483 S 337.9t3 3 372.433 $ 337,699 $ 366,400 Supphes 8 Services S.b Tmal S 3.849 1113 S 3606,897 S 7,564,117 $ 4.010.360 $ 4,989229 Total Operating Egrenses S 26,051608 S 24119.22 j 28.6M.745 S 22,875.653 S 27,402,329 £..perses(Non-Opeiaung) atletesi E-Verse S 1.715!29 S 1,683039 S 1655-68-5 S 1693,461 $ 1,721,884 Other Eapense S 47.948 S 116 528 L-----Z2.00 S 37.354 S 23000 . $ 1.763.377 S 1199.567 S 1,677,885 S 1.730.615 f 1,744.8151 Taal EjVerrees S 27.615.185 f 26.118,989 $ 30286.430 $ 24.606,468 3 29,147-273 Net heome Before Capital Cmn buhons 3 S 5.992.785 S 2254,384 9,854.807 f 1,568299 EAraordinary hem S Capital Conlnbubens S 421,443 $ Nei Yuroltle Before Deprec $7.5 Million 2,254,384 S 10.275250 $ 4558.296 Over Charge 4 MATERIALS SUBMITTED BY: Al Nederhood MEETING DATE: April 6, 2017 Yorba Linda Water District Water Furnd For Peripd EncBrrg June 30,2016 Annual YTD YTD YTO YTO Budget Budget Actual Under(Over) %M Annual FY 2016 FY 2016 FY 2016 FY S Wyet Budget Revenue(Operating)' Water Revenue ER—denuap $11,472.028 S71,4T2,028 812,522,617 (1,050,589) 109.16% Water Revenue(Commercial d Fire Det) 1,385,979 1,385 979 1.711,104 (325,125) 123.46% Water Revenue(Landsapehriga0on) 2,782,483 2,782,103 2,700,775 81.408 97.07% Water Revenue(Service Charge) 10,824,413 10,824,413 10,888,142 (61.729) 100.57% - Other Operatirrg Revenue 3 556 978 3.556.678 2,596,206 960 473 73.00% Total Operating Revenue: 30,021,281 30,021,281 30,416,844 (395,0 101.32% Revenue(Non-Operating/. Interest 85,000 WOOD 265,006 (1801006) 311.77% Property Tax 1.395.000 1,395.000 1,615,454 (220,454) MAD% Other Non-Opera5ng Revenue 595,230 595,230752 776 (157.546)) 126.47% _ Total Non-Operdling Revenue, 2,075,230 2,075,230 2,633,236 1558,006) 126.69% Total Rawnue 32,096.571 32,096,511 33,050A60 f963.5681 10297% Expenses(Operating)r Variable Water Costs{G.W.,Import&Power) 12,880410 12.080.440 10,467,374 t,613,036 86.65% Salary Related Expenses 8,116,352 8,118,352 7,617,747 500,605 96.25% Supplies&Services. Communir(ions 280,232 280,232 208,295 71,938 74.33% Cantractual Services 545.124 545,124 494,685 50,439 90.75% Data Processing 279,461 279,461 210,246 69,215 75.23% Dues&Nlemherships 106,773 106,773 73,585 33,188 68.92% Fees&Permits 2,718,822 2,718,822 211,384 2.507,436 7.77% Insurance 253,598 253,596 238,391 15.205 94.00% Matenals 690,479 690,419 774,083 (83.SD4) 112.11% District Pcevities,Emp Recognitwn 27,072 27,072 7.888 19,164 29.14% Maintenance 445,647 445,647 338,712 106,935 76110% Non-Cepiial Equipment 148.338 148,338 146,658 1,679 98.87% Office Expense 39,851 39,851 38,3&5 7.466 96 32% Professional Services 494,350 494,350 627,452 (133,102) 126.82% Training 67,718 87,718 23,863 43,658 35-24% Travol&Conference, 88,406 86,4D8 45,877 42.529 55.68% Uncollectible Accounts 37,200 37,200 61,639 (24,439) 185$9% Uttiilies 83,700 83.700 79,118 4,584 94.52% Vehicle Equipment 300.328 300,328 31 630 12,3021 104-10% Suppiies&Services Sub-Total 6,607,097 6,607,087 3,892,890 2,714,207 58.92% Total Operating Expenses 26,80.5.859 26.805,859 21,978,011 4,827,848 81.99% Expenses(Non-Opera5rg): Interest on Long Tern Debt £,655,685 1,655,60,5 1,671,539 (15,854) 100.96% Other F)gtense 22\000 22,000 970 21,030 4.41% Total Non-Operating Epensos.- 1,877,885 1,677,685 1,672509 5,176 99.69% Tato EXpensaa 28,483,544 28,4a3,5M 23,850,520 4AMA24 83.03% Net Income(Loss)Before Capital Contributions 3,612,967 3,612,967 9,399,560 (5,788,9931 260.18% Capital Cont bopons - - 347,795 347,795 0.(0% Net Income(Loss)BNom Deprecation 3,612,967 3,612,967 9,747,355 (5,438,796) 269.79% Deprectation&Amortization 6,003,400 6,003,400 6,181,174 (177,774) 102.96% Total Net Income(Loss) 1$2,390,4331 62.290.433E $8,566,181 (151 -14Y.1$% Capital-Direct Labor (195,763) FY 2015/16 CIP/R&R ($5.6 M) Debt Payment(COC) ($7.0 M} Reserves(Contribution) ($3.2M) 5 MATERIALS SUBMITTED BY- Al Nederhood MEETING DATE- April 6, 2017 FY 2015 / 16 Actual Financials Overview (Water Only, CAFR) Category Total Revenue $33.0 M. Water Expenses $10. 5 M. Salaries $7.6 M. Supplies Et Services $3.9 M. Interest Expenses $1 .7 M. Net Income $9.4 M. CIP/ R Et R ($5.6 M. ) Debt Payment (LOC) ($7.0 M. ) Reserves (Contribution) ($3.2 M. ) MATERIALS SUBMITTED BY: Al Nederhood MEETING DATE: April 6, 2017 FY 2016 / 17 Projected r r Category, J Projected I Budget Total Revenue $31 . 5 M $31 . 6 M Water Expenses (variable) $12.9 M $13.2 M Salaries $7.9 M $8. 3 M Supplies Et Services $3. 5 M $4. 3 M Interest Expenses $1 .6 M $1 .7 M Net Income $5.6 M $4.0 M CIP/ R Et R ($6.8 M) $5. 5 M g Reserves (Contribution) ($1 .2 M) 00 � MATERIALS SUBMITTED BY: Al Nederhood MEETING DATE: April 6, 2017 Phi* losophy T 0 P Rates D , B 0 0 Budgeted Expenses W T N T 0 Capital Improvement $ M Reserve Structure P ing Ah&L( ikt Rat MATERIALS SUBMITTED BY: Al Nederhood MEETING DATE: April 6, 2017 RATE RUBRIC Category #1 #2 #3 Choice 1 . Credit Rating A AA AAA ' - - - $30 M $35 M $40 M Wm4 191 10,410618 $1 M $2 M $3 M 3. Salaries/ - - . - 1 % 2 % 3% 4. Supplies/Services ad 1 % 2 % 3% 5. Water • 8 % 10 % 12 % 6. Power • 8 % 10 % 12 % 7. Revenue $32 M $34 M $36 M 8. Connection Cha • - $25/Mnth. $35/Mnth. $45/Mnth. • Usage Charge 60 % 70 % 80 % 10. Conservation ' - • • -10 % -15 % -20 % 9 MATERIALS SUBMITTED BY: Al Nederhood MEETING DATE: April 6, 2017 • Going Forward 1 . Bottom Up Approach 2. Credit Rating 3. Reserves 4. CIP/ R Et R 5. Salaries, Supplies Et Services 6. Interest Payments (bonds/debt) 7. Revenue 8. Rates Et Rate Model A. Connection Charge B. Usage Charge C. Conservation MATERIALS SUBMITTED BY: Al Nederhood MEETING DATE: April 6, 2017 CAC Finance Presentation Document Listing and Identification April 6, 2017 1. Campaign P & L Analysis FY 2015/16 (Forecast) and FY 2016/17 (Budget) 2. VVaLer Fund P & L Y T D aCCUdi FY June 2016 (Silde 44) 3. Statement of Net Position see Line * "Total Unrestricted Assets" $ 8 million additional funding to Reserves 4. Cash Investment Summary Report 9/2016 Cnn irtrJir�+;mg 4`-7 I n ' rirJ nFf .oma. y%,.uvvv IubinibilL f1dwa,uuilb Vol iuuvw� �ruiN vii 5. A, B, C & D Board approval to pay off LOC 6. Water Capital Reserve Investment Acct Balance 5/31/2016 7. CA Special District Association General euidelines on Reserves 8. Recap of Bond Rating Agencies Reserve guidelines 9. Annual Operating Budget FY 2016/17 See * for recap of Administrative Penalties due to Gov. Brown's Conservation Mandate. 10. YLWD Connect Charge history 11. Budget Time Table 12. Depreciation Schedule for Capital Improvement Plan (CIP) and Restore and Replace (R&R) capital expenditures. MATERIALS SUBMITTED BY: Al Nederhood MEETING DATE: April 6,2017 � 1 Vote "YES" on the Recall Bride of rba Linda Frankenstein er District ANNUAL OPERAT/NG BUDGET F/SCALY BUdget Frankenstein � Total Revenue and Expenses (Water & Sewer) Budget �.�� rGy1,��FY 2015/16 FYE 2015116 FY 2016117 Actual Actual Budget Forecast Budget enue(Operating) Water Revenue(Residential) S 17.502.293 $ 15.461.640 S 11.472.028 S 12.412.726 S 13.907.406 Water Revenue(Comme(cial 8 Fite Det) S 1.984.096 $ 1,913.712 S 1.385.979 $ 1.710.564 $ 1.874.818 Water Revenue(Landscape/Irrigation) S 4,543,942 $ 4,058.308 S 2.782,1113 S 2700.775 S 2.998.777 Service Charges S 4.341.965 S 5.012.958 S 9.426.652 S 10.559.242 S 10,036.923 Sewer Charge Revenue S 1.565.548 S 1,582,061 $ 1.584.348 S 1.669.166 S 1.852.837 Sewer Parcel Assessments S 201.054 S 193.615 S 201.500 $ 178.742 $ 198.400 \ Other Operating Revenue' S 1.047.625 $ 1.461.103 S 3.592.969 $ 2.654.689 S 654.825 Total Operating Revenue S 31.186.523 $ 29.683.397 $ 30.445.658 $ 31.885.904 S 31.523.986 qq #/� RevenuelNon-Operating) $1.5 Million tnteresl $ 145.048 S 187.316 $ 93.000 $ 247.350 S 115.000 Property Tax S 1.394.722 S 1.496.489 S 1.395.000 S 1.593.548 $ 1.450. Over Other Non-Operating Revenue $ 1.325.685 S 744.572 $ 607.155 S 734,473 $ 616.52 Total Non-Operating Revenue S 2.865 455 S__ 2A28.377 S 2.095.155 S 2.575.371 S 2,181,525 Total Revenue S 34.051.978 $ 32.111.774 S 32.540.813 $ 34.461.275 S 33.705.511 Charee Expenses(Operating) Variable Costs Water-Related Costs S 12,532.484 S 9.971.717 $ 9111 A65 S 7.727.491 S 10,575.305 Fused Costs S 982.728 S 1.279.711 S 1.565.541 S 1.531.228 S 1.475.751 Power-Related Costs S 1.157.932 S 1.482.334 S 1.403.404 S 1.090.388 S 1.128.422 Variable Water Costs Related Expenses Total S 14.673.144 S 12.733.762 $ 12.080.410 S 10.349.107 S 13.179.477 Salary Related Expenses S 7.529.481 S 7.778.763 S 8.870,465 S 8.426.450 S 9.108.277 Salary Related Expenses-Limited-term Stall S - S $ 228.753 S 297.629 S 355.346 Reduction for Capital Pro)ect Labor S - $ S (135.000) S (207.893) S 1210.000) Salary Related Expenses Total S 7,529.481 S 7.778,763 S 8.964.218 $ 8.516.186 S 9,253.623 Supplies 8 Services. Communications $ 204.063 S 301.525 $ 202.463 S 258.925 Contractual Services 480.129 $ 586.155 $ 486.575 S 558.265 Data Processing 177,740 $ 233.829 $ 223.556 S 263.709 Dues 8 Membership 73.915 $ 115.110 $ 78.627 S 95.785 \ 3 Million Fees 8 Permts" 2.926.665 $ 193.053 $ 251.425 Board Election - S S 246. Insurance Over Charge 1760 S 296.340 S 256.334 S 286. �/ �/� Materials 693.065 $ 795.950 S 783.940 S 829 $1 (Million District Activities.E 16.249 S 29.110 S 8.179 S 2 Maintenance 523.557 S 747,345 $ 427.954 S Over Charge Non-Capital Equipment $ 164,726 S 167.750 S 155.926 S 195. Office Expense 65 $ 49.285 S 42.850 S 34.699 S 43. Professional Services 532.899 s 448.130 5 644.710 $ 608.192 $ 598. Training S 34.071 S 47.728 S 75.015 S 25.107 S 77,085 Travel 8 Conferences S 29.453 S 34.618 S 98.480 S 44.596 S 124.965 Uncollectible Accounts S 29.632 S 14.026 S 40.000 S 68.699 S 35.000 Utilities S 38201 S 77.400 $ 90.850 S 74.561 S 125.800 Vehide Expenses S 409.483 S 337.913 S 372.433 S 337,899 S 386.400 Supplies 8 Services Sub-Total S 3.849.183 S 3.806.897 S 7.564.117 S 4.010.360 S 4.969.229 Total Operating Expenses 5 26.051.808 S 24.319.422 S 28.608.745 S 22.875.653 S 27.402.329 Expenses(Non-Ope(ating). Interest Expense S 1.715A29 $ 1.683.039 S 1.655.685 S 1.693.461 S 1.721.884 Other Expense $ 47.948 S 116,528 S 22.000 $ 37.354 S 23.000 Total Non-Operating Expenses S 1.763.377 S 1.799,567 $ 1,677.685 $ 1.730.815 $ 1.744.884 Total Expenses S 27.815.185 $ 26.118,989 S 30,286,430 $ 24.606,468 S 29.147.213 Net Income Before Capital Contributions 3 S 5.992.785 S 2.254.384 9.854.807 S 4.558.298 Extraordinary hem S Capital Contributions S 421,443 $ Net Income Before Deprec Million .38 2.2544 S 10276.250 S 4.558.298 $7.5 Over Charge MATERIALS SUBMITTED BY: AI Nederhood MEETING DATE: April 6,2017 V Yorba Linda Water District Water Fund For Period Ending June 30,2016 Annual YTD YTD YTD YTD Budget Budget Actual Under(Over) %of Annual FY 2016 FY 2016 FY 2016 FY Budget Budget Revenue(Operating). Water Revenue(Residential) $11,472,028 $11,472,028 $12,522,617 (1,050,589) 109.16% Water Revenue(Commercial&Fire Det.) 1,385,979 1,385,979 1,711,104 (325,125) 123.46% Water Revenue(Landscape/Irrigation) 2,782,183 2,782,183 2,700,775 81,408 97.07% Water Revenue(Service Charge) 10,824,413 10,824,413 10,886,142 (61,729) 100.57% Other Operating Revenue 3,556,678 3,556,678 2,596,206 960,473 73.00% Total Operating Revenue: 30,021,281 30,021,281 30,416,844 (395,563) 101.32% Revenue(Non-Operating): Interest 85,000 85,000 265,006 (180,006) 311.77% Property Tax 1,395,000 1,395,000 1,615,454 (220,454) 115.80% Other Non-Operating Revenue 595,230 595,230 752,776 157,546 126.47% Total Non-Operating Revenue: 2,075,230 2,075,230 2,633,236 (558,006) 126.89% Total Revenue 32,096,511 32,096,511 33,050,080 (953,569) 102.97% Expenses(Operating) Variable Water Costs(G.W-,Import&Power) 12,080,410 12,080,410 10,467,374 1,613,036 86.65% Salary Related Expenses 8,118,352 8,118.352 7,617,747 500,605 9625% Supplies&Services. Communications 280,232 280,232 208,295 71,938 74.33% Contractual Services 545,124 545,124 494,685 50,439 90.75% Data Processing 279,461 279,461 210,246 69,215 75.23% Dues&Memberships 106,773 106,773 73,585 33,188 68.92% Fees&Permits 2,718,822 2,718,822 211,384 2,507,438 7.77% Insurance 253,596 253,596 238,391 15,205 94.00% Materials 690,479 690,479 774,083 (83,604) 112.11% District Activities,Emp Recognition 27,072 27,072 7,888 19,184 29.14% Maintenance 445,647 445,647 338,712 106,935 76.00% Non-Capital Equipment 148,338 148,338 146,659 1,679 98.87% Office Expense 39,851 39,851 38,385 1,466 9632% Professional Services 494,350 494,350 627,452 (133,102) 126.92% Training 67,718 67,718 23,863 43,855 3514% Travel&Conferences 88,406 88,406 45,877 42,529 51.89% Uncollectible Accounts 37,200 37,200 61,639 (24,439) 165.69% Utilities 83,700 83,700 79,116 4,564 94.52% Vehicle Equipment 300,328 300,328 312,630 (12,302) 104.10% Supplies&Services Sub-Total 6,607,097 6,607,097 3,892,890 2,714,207 58.92°! Total Operating Expenses 26,805,859 26,805,859 21,978,011 4,827,648 81.99% Expenses(Non-Operating): Interest on Long Terre Debt 1,655,685 1,655,685 1,671,539 (15,854) 100.96% Other Expense 22,000 22,000 970 21,030 441% Total Non-Operating Expenses: 1,677,685 1,677,685 1,672,509 5,176 99.69% Total Expenses 28,483,544 28,483,544 23,650,520 4,833,024 83.03% Net Income(Loss)Before Capital Contributions 3,612,967 3,612,967 9,399,560 (5,786,593) 260.16% Capital Contributions - - 347,795 347,795 0.00% Net Income(Loss)Before Depreciation 3,612,967 3,612,967 9,747,355 (5,438,798) 269.79% Depreciation&Amortization 6,003,400 6,003,400 6,181,174 (177,774) 102.96% Total Net Income(Loss) ($;2,390,433) ($2,390,433) $3,566,181 ($5,956,6141 -149.19% Capital-Direct Labor (195,783) FY 2015/16 CIP/R& R ($5.6 M) Debt Payment(LOC) ($7.0 M) Reserves(Contribution) ($3.21M) MATERIALS SUBMITTED BY: Al Nederhood MEETING DATE: April 6,2017 YORBA LINDA WATER DISTRICT STATEMENTS OF NET POSITION June 30,2016 (With prior year data for comparison only) ASSETS AND DEFERRED OUTFLOWS 2016 2015 OF RESOURCES CURRENT ASSETS: UNRESTRICTED ASSETS: Cash and cash equivalents(Note 2) $ 32,387,523 $ 24,026,870 Investments(Note 2) 7,288,244 7,283,882 Accounts receivable-water and sewer services 4,216,747 3,342,733 Accounts receivable-property taxes 13,629 16,168 Note receivable 75,540 72,634 Accrued interest receivable 46,424 36,563 Prepaid expenses and deposits 292,950 270,984 Inventory 234,899 262,162 TOTAL UNRESTRICTED ASSETS } ��`► � 44,555,956 35,311,996 RESTRICTED ASSETS: Cash and cash equivalents(Note 2) 78,403 55,756 Investments(Note 2) 2,120,732 2,121,768 TOTAL RESTRICTED ASSETS 2,199,135 2,177,524 TOTAL CURRENT ASSETS 46,755,091 37,489,520 NONCURRENT ASSETS: Capital assets(Note 4): Not depreciable 5,005,418 3,533,928 Depreciable,net of accumulated depreciation 184,944,351 190,817,182 Note receivable 78,567 154,107 Other post-employment benefit(OPEB)asset(Note 6) 276,289 142,700 TOTAL NONCURRENT ASSETS 190,304,625 194,647,917 TOTAL ASSETS 237,059,716 232,137,437 DEFERRED OUTFLOWS OF RESOURCES: Deferred amounts from pension plans 712,574 587,176 Deferred amount on refunding 425,220 450,051 TOTAL DEFERRED OUTFLOWS OF RESOURCES 1,137,794 1,037,227 See accompanying notes to basic financial statements. (Continued) - 14- C4—"Oy rx: MATERIALS SUBMITTED BY: Al Nederhood MEETING DATE: April 6,2017 e Cash & Investment Summary Report Below is a chart summarizing the yields as well as terms and maturities for the month of September 2016: Average #of Month Portfolio Days to of 2016 Yield Maturity September 0.94% 205 Below are charts comparing operating fund interest for current and prior fiscal years. Actual Interest 9/30/2015 9/30/2016 Monthly-September $ 15,852 $ 24,431 Year-to-Date $ 38,352 $ 54,720 Budget 2015/2016 2016/2017 Interest Budget, September YTD $ 23,250 $ 37,500 Interest Budget,Annual $ 93,000 $ 115,000 Interest earned on investments is recorded in the fund that owns the investment. Cash&Investment Summary Comparison Between Current and Previous Month The distribution of investments in the portfolio both in dollars and as a percentage of the total portfolio by funds is as follows: Total of$33.9 million in cash and investments which is split between minimum reserve requirements and what is available to meet current year obligations(operating costs, debt service, capital costs). Reserve Cash and Requirements Investments August 2016 %Alloc September 2016 %Alloc "Conditional Available for Fund Description Balance 8/31/2016 Balance 9/30/2016 Use" CY Obligations Water Operating Reserve $ 4,353,932 10.52% $ 3,467,739 10.34% $ 4,132,257 (280,878) Water Emergency Reserve 1,043,001 2.52% 1,043,874 3.11% 1,042,888 986 Water Capital Project Reserve 25,037,048 60.49% 17,951,045 53.54% 1,820,000 16,131,045 Water Reserve for Debt Service 2,723,509 6.58% 2,772,175 8.27% 2,723,509 48,666 Maintenance Reserve 200,252 0.48% 200,252 0.60% 200,000 252 Water Employee Liability Reserve 371,998 0.90% 371,992 1.11% 372,000 (8) Conservation Reserve 1,560,900 3.77% 1,507,151 4.49% 0 1,507,151 COP Revenue Bond 2008-Reserve 2,166,844 5.24% 2,156,576 6.43% 2,147,096 9,480 Sewer Operating Reserve 106,066 0.26% 206,079 0.61% 239,825 44,428 Sewer Emergency Reserve 1,033,825 2.50% 999,664 2.98% 1,000,000 (336) Sewer Employee Liability Reserve 28,000 0.07% 28,000 0.08% 28,000 0 Sewer Capital Project Reserve 2,765,448 6.68% 2,826,851 8.43% 345,000 2,481,851 $ 41,390,822 100.00% $ 33,531,397 100.00% $ 14,050,575 19,942,635 Wells Fargo Bank Checking Water Operating 510,043 383,640 Sewer Operating 173,275 78,174 683,318 461,814 Totals $ 42,074,140 $ 33,993,210 MATERIALS SUBMITTED BY: Al Nederhood MEETING DATE: April 6,2017 Material Distributed Less Than 72 Hours Prior to the Meeting ITEM NO. 7.A. AGENDA REPORT Meeting Date: August 25, 2016 To: Board of Directors Cost Estimate: $7,022,000 From: Marc Marcantonio, General Mgr Presented By: Marc Marcantonio, General Mgr Dept: Finance Prepared By: Delia Lugo, Finance Manager Subject: Pay Off of Line of Credit with Wells Fargo Bank STAFF RECOMMENDATION: That the Board of Directors authorize staff to pay off the outstanding $7 million principal, accrued interest, and affiliated fees pertaining to the 2012 Line of Credit Agreement between Yorba Linda Water District and Wells Fargo Bank which is due and payable on September 30, 2016. DISCUSSION: In September of 2012 the District entered into a $7 Million Line of Credit Agreement with Wells Fargo Bank, as authorized by Resolution No. 12-18. The Line of Credit Agreement, which is subordinate to the 2008 COP's and the Revenue Refunding Bonds, Series 2012A, states that the borrowings are due and payable in 3 years, with the option to two single year maturity date extensions at the request of the District and approval by Wells Fargo Bank. In Fiscal Year 2014/15 the District exercised an option to extend the Line of Credit maturity date to September 30, 2016, which was approved by Wells Fargo Bank and authorized by Resolution No. 13-16. On May 25, 2016, in conjunction with developing the District's 2016/2017 Operating Budget, staff contacted Wells Fargo Bank and expressed interest in exercising the last of two options to extend the Line of Credit's maturity date from September 30, 2016 to September 24, 2017. On August 3, 2016 staff received a quote from Wells Fargo Bank stating that the cost to extend the maturity date of the Line of Credit to September 24, 2017 is estimated to be up to $25,000. In addition, Wells Fargo Bank is requesting that the District pay-down the principal amount by $3.45 million and to make monthly payments in the amount of $200,000 to pay down the remaining principal due over the next year, with a balloon payment of the remaining principal due on the maturity date in 2017. Upon receiving this quote staff performed an analysis of projected fees and interest expense of the District for the following scenarios: (1) pay-down principal by $3.45 million, make monthly payments of $200,000 over the next year, and pay a MATERIALS SUBMITTED BY: Al Nederhood MEETING DATE: April 6,2017 Material Distributed Less Than 72 Hours Prior to the Meeting balloon payment at maturity; and (2) forego the request to extend the maturity date and pay off the full $7,000,000 by September 30, 2016. The attached schedule (Attachment "A") lists the projected cost to the District for these two scenarios. Staff has been in communications with Mr. Robert Porr, the District's Financial Advisor and Senior Vice President of Fieldman Rolapp &Associates, to discuss the cost/benefit to the District to extend the Line of Credit's maturity date or to pay off 100% of the principal due on September 30, 2016. Issues prompting these discussions include the District's future rate review by Fitch Ratings and the presented opportunity to Advance Refund the 2008 COP's. Either scenario would require the District to draw down funds from the Water Capital Projects Reserve, hence effecting the District's overall projected average Daily Cash on Hand to meet budgeted operating and capital expenses, as well as annual debt service principal and interest payments. Based on analysis' performed by and discussions with Robert Porr, the option with the greatest benefit to the District would be to pay off the full principal amount due on the Line of Credit by September 30, 2016. ATTACHMENTS: Analysis of Fees and Interest Expense Quote from Wells Fargo for Extension of Line of Credit MATERIALS SUBMITTED BY: Al Nederhood MEETING DATE: April 6,2017 Attachment "A" Wells Fargo Line of Credit Analysis of Fees and Interest Expense for Pay-Down or Pay-Off Scenarios Scenario 1 - Pav-down $3.5M on LOC (in Sept 2016) and Extend Maturity Date to Sept. 2017 & Make Monthly Pavments of$200K Over Next Year (1st Qtr. Also Includes Payment of$25,000 in Legal Fees to Extend Maturity Date) FY2016-17 FY2017-18 Total 1st Qtr. $46,914 $4,799 $51,713 2nd Qtr. $10,373 $0 $10,373 3rd Qtr. $8,336 $0 $8,336 4th Qtr. $6,582 $0 $6,582 Annual Fees and Interest Expense $72,205 $4,799 $77,004 Scenario 2 - Pav-off Principal of LOC by September 30, 2016 FY 2016-17 FY2017-18 Total 1st Qtr. $21,914 $0 $21,914 2nd Qtr. $0 $0 $0 3rd Qtr. $0 $0 $0 4th Qtr. $0 $0 $0 Annual Interest Expense $21,914 $0 $21,914 MATERIALS SUBMITTED BY: Al Nederhood MEETING DATE: April 6, 2017 Wells lls 1.0 go flanh, N',. SaS (Iruul_Avcnur Flf)oI Date:August 3, 2016 Delia D. Lugo Finance Manager Yorba Linda Water District 1717 E. Miraloma Avenue Placentia, CA 92870 Re: Line of Credit Extension Request Yorba Linda Water District has requested to extend the current maturity date of the subject line of credit from September 30, 2016 to September 24, 2017. If approval is granted, we anticipate that draws would remain at the existing pricing which is currently 70%1ML+9obps and an unused commitment fee of 35bps. We would engage outside counsel to negotiate the amendment with estimated legal costs of up to $25M. Per our conversation on July 28, 2016 and your Request to Extend the maturity date of the line of credit dated May 25, 2016, we would explore the following structure as part of the extension request. The District has funds in the Water Capital Project Reserve account to meet its obligation to repay the principal amount drawn from the Line of Credit. Should the refunding process move forward, as well as the request to extend the Line of Credit maturity date to September 30, 2017 be granted, there are plans to include a pay-down of approximately $3.45 million on the Line of Credit,which would result in a principal balance due of$3.55 million. The District anticipates that it will make monthly payments to WFB in the approximate amount of $200,000 to pay down the remaining principal due over the next year, with a balloon payment of the remaining principal due on the maturity date in 2017. Let me know if you have any additional questions or need further information. JR ards, Y ` Lyn Love Senior Vice President Senior Relationship Manager MATERIALS SUBMITTED BY: Al Nederhood MEETING DATE: April 6,2017 It Water Capital Reserve/Investment Acct Balance 5/31/2016 i0 t3 WFB Letter of Credit Balance for Draws 5/31/2016 $0 Less Minimum Water Capital Reserve Requirement $1,820,000 Water Capital Funds Available for Use at 5/31/2016 $17,352,503 /----------Total CIP Budget as Approved----------\ 5 Year CIP Budget For Expenditures for g p Approved Projects Recommended Current CIP Budget Revised Total Total Projected 8 CIP Expenses FY 16/17 FY 17/18 FY 18/19 FY 19/20 FY 20/21 Budget For FY Adjustments to CIP Budget For Budgeted CIP Budgeted CPP Budgeted CIP Budgeted CIP Bud eted CIP 2015/16 Listed CIP FY 2016/17 Thru FYE June g / 2016 Expenditures Expenditures Expenditures Expenditures Expenditures Water Capital Funds Available for Use Budgets S&W Well Project(Well No.21) $ 2,306,789 5 $ 2,306,789 $ 1,8c/,USS 5 258,636 5 S&W Well Project(Well No.22) $ 2,500,000 5 - $ 2,500,000 $ 42,619 $ 315,000 $ 765,000 $ 910,000 Lakeview Grade Separation $ 662,444 - $ 662,444 $ 407,124 $ 250,000 Fairmont BPS Upgrade $ 6,300,000 $ 1,530,005 $ 7,830,005 $ 760,005 $ 1,596,000 $ 3,886,000 $ 1,588,000 $ $ Richfield Road Pipeline $ 1,450,000 $ - $ 1,450,000 $ 108,538 5 1,114,746 5 - $ S Subtotal $ 13,219,233 $ 1,530,005 $ 14,749,238 $ 3,185,373 $ 3,534,382 $ 4,651,000 $ 2,498,000 $ $ Rehabilitation&Restoration 2015 Waterline Replacement $ 1,240,000 - $ 1,240,000 $ 190,030 $ 608,960 5 $ $ Timber Ridge BPS Rehabilitation $ 250,000 650,000 $ 900,000 $ $ - S 900,000 $ - $ $ Lakeview Booster Piping $ 100,000 54,000 $ 154,000 $ - $ - $ 130,900 $ 23,100 $ $ PRS Rehabilitation Phase 2 $ 1,430,000 (704,000) $ 726,000 $ 1,690 $ 448,800 S 79,200 $ - $ $ Annual Routine Capital R&R $ 3,668,590 $ (1,530,005) $ 2,138,585 $ $ 950,000 $ 950,000 $ 1,500,000 S 1,500,000 R&R Subtotal $ 6,688,590 $ (1,530,005) $ 5,158,585 $ 191,720 $ 1,057,760 $ 2,060,100 $ 973,100 $ 1,500,000 $ 1,500,000 Vehicle and Capital Equipment Replacement (Single Year Budget Forecast) Vehicle&Capital Equipment Replacement-Sewer $ 680,000 $ $ - $ 680,000 $ - $ 200,000 $ 200,000 $ 200,000 $ 200,000 Vehicle&Capital Equipment Replacement-Water $ 392,000 $ $ 683,500 $ 87,000 $ 963,500 $ 165,000 $ 177,000 $ 180,000 $ 175,000 Vehicle&Capital Equipment Subtotal $ 1,072,000 $ $ 683,500 $ 767,000 $ 963,500 $ 365,000 $ 377,000 $ 380,000 $ 375,000 Repayment of LOC Principal to Wells Fargo Bank $7,000,000 $ Grand Total $ 20,979,823 $ $ 20,591,323 $ 4,144,093 # $ 12,555,642 $ 7,076,100 $ 3,848,100 $ 1,880,000 $ 1,875,000 Remaining Water Capital Reserve for CIP Obligations $ 17,123,763 $4,568,121 ($2,307,979) ($5,956,079) ($7,636,079) ($9,311,079) Remaining Water Capital Reserve w/July 2016 Balance $ 25,236,861 $12,681,219 $5,805,119 $2,157,019 $477,019 ($1,197,981) MATERIALS SUBMITTED BY: Al Nederhood MEETING DATE: April 6,2017 Reserve Level Targets A reserve policy must set a target level of reserves th California Special g typically ms Local Conditions to maintain.The target is t icall defined in ter rr Districts Association tlr'f of unrestricted fund balance as a percentage of ©©DO Districts Stronger Together --- either regular operating revenues or regular operating as a Basis expenditures.The choice between revenue and The Government Finance Officers Association notes expenditures as a basis depends on which element that fund balance is ultimately Special is more predictable.A government that relies heavily a local decision based on ;ia on property taxes typically p p y ypicall would choose revenues, local conditions."...Finance whereas a government with a less predictable staff should analyze the risks D■ ■ �{ +# ' revenue portfolio might choose expenditures. In that influence the need for `str'ct I I`� either case,the base should only reflect operating maintaining reserves as a numbers and should remove the effect of unusual hedge against uncertainty and loss." I 114 " spikes or drops that would distort long-term trends. Reserve I I ti 1 a (p.57,GFOA,Financial Policies) i ! + t With the basis of the target defined,the next step is to 1 { select a reserve-level target number.The Government Guidelines *�A Finance Officers Association(GFOA)offers guidance M as to the amount of unassigned fund balance SECOND EDITION governments should maintain in their general fund #' operating revenues or regular general fund operating expenditures, regardless of size.As special-purpose governments,special districts should carefully balance such general advice with the unique circumstances associated with the district's operational environment. In considering what constitutes adequate reserves,a special district may want to establish key benchmarks or ratios. Many industries have key equity target formulas or ratios that establish minimums to provide a red flag warning when equity may be too low.Some of _ r those ratios may include the following: • Debt to Equity =•:rho • Property Taxes to Equity + Ili b14# 4 . Current Ratio • Capital Outlay to Equity • Capital Outlay to Operating Expenses lam_ Certain districts may establish their own ratios based on the unique aspects of the district or an operating environment that may be different than other A GUIDE TO DEVELOPING A PRUDENT RESERVE. organizations in their industry. ..................................................................................................................................................................................................... MATERIALS SUBMITTED BY: Al Nederhood MEETING DATE: April 6,2017 Days of Cash - Rating Agency Requirements to AA+ AAA - AAS to' a �. S&P D & Days <150>90-g Days <90>60 Cash Balance > Cash Balance < Cash Balance < $75M $75M>$20M $20M>$5M Aaa Aa A 250 days >N >150 150 days >_ N > 35 Moody's Days > 250 days days Strong Midrange Weaker Fitch Days >_ 365 Approx 6 Months 3 Months or Less *N= Cash on Hand, "Days of Cash" is only one component of Rate Result 4;g` ��<!��d ��l MATERIALS SUBMITTED BY: Al Nederhood MEETING DATE: April 6,2017 ® Yorba Linda Water District ANNUAL OPERATING BUDGET FISCAL YEAR 20IF6117 Interest Income for the water operating funds is projected based on an average yield of 0.5% on the District's portfolio. Property Tax Income is projected based on the assumptions of the Orange County Tax Assessor. The District anticipates receiving 97% of its share of the ad valorem tax revenue, which will result in a 1% increase when compared to the previous year. Other Non-Operating Revenue, which include but are not limited to annexation fees, rental income, and other sources, are projected based upon historical activity and current economic conditions. $6,0(x),000 Other Water Revenue $595,230 $5,000,000 $652,0% $1,395,000 $4,000,000 $85,000 $1,593,548 $715,022 $3,000,000 $1,255,176 $227,54 $1,4%,489 $604,60052,000,000 $1,394,722 $168,872 2 1 $1,450,000 ti1,000,00i) $131,8$, $936,977 $1 $100,000. 617,6 $0 FY 2013/14 Actual FY 2014/15 Actual FY 2015/16 Budget FY 2015/16 Forecast FY 2016/17 Budget ■Other Operating Revenue ■Interest Income Property Taxes :Other Non-Operating Note. FY 2015/16 Budget includes $2,911,568 of Administrative Penalty revenue. Only approximately $1,700,000 was collected, net of credits back to customers. This amount is reflected in FY 2015/16 Forecast. There is no Administrative Penalty revenue budgeted for FY 2016/17. 551 MATERIALS SUBMITTED BY: Al Nederhood MEETING DATE: April 6,2017 41) Yorba Linda Water District ANNUAL OPERATING BUDGET FISCAL YEAR 2016117 INMAIWIu�119.l iiNdihla�ILli I.A. JII1.��AI.1�J,4Y1.�.IlYlm,..'6el.Y WLI L..a.Y,11YIII{�n lld1..,llYLLii�L.iIYWILNL.LINK.1J.i.i�l l...Al I...I 1 JiAI IN;..A,L�'I ----"�.Li4iJ4 �V�lYV�i�I�II.1 Isle..�111.dLLILil.llliilitli1111✓WW�IWWIINIY Rate History Monthly Commodity Minimum Monthly Commodity Minimum Allowance Charge Monthly Allowance Charge Monthly Year (CCF) (CCF) Charge Year (CCF) (CCF) Charge 1960 20 $0.06 $3.50 1989 5 $0.59 $5.95 1961 20 $0.06 $3.50 1990 5 $0.61 $6.15 1962 20 $0.06 $3.50 1991 5 $0.66 $6.65 1963 20 $0.06 $3.50 1992 5 $0.76 $7.65 1964 10 $0.10 $3.50 1993 0 $0.92 $4.65 1965 10 $0.10 $3.50 1994 0 $0.98 $4.65 1966 10 $0.10 $3.50 1995 0 $0.98 $4.95 1967 10 $0.10 $3.50 1996 0 $0.98 $4.95 1968 8 $0.12 $3.50 1997 0 $0.98 $4.95 1969 6 $0.14 $3.50 1998 0 $0.98 $4.95 1970 6 $0.16 $3.50 1999 0 $0.98 $4.95 1971 6 $0.16 $3.50 2000 0 $1.03 $5.20 1972 6 $0.16 $3.50 2001 0 $1.03 $5.20 1973 6 $0.18 $3.50 2002 0 $1.13 $5.70 1974 6 $0.20 $3.50 2003 0 $1.33 $5.70 1975 6 $0.20 $3.50 2004 0 $1.33 $6.70 1976 6 $0.24 $3.50 2005 0 $1.57 $7.92 1977 6 $0.24 $3.50 2006 0 $1.57 $7.92 1978 6 $0.27 $3.50 2007 0 $1.57 $7.92 1979 6 $0.27 $3.50 2008 0 $1.79 $8.35 1980 6 $0.30 $3.50 2009 0 $2.52 $10.20 1981 6 $0.30 $3.50 2010 0 $2.52 $11.73 1982 6 $0.30 $3.50 2011 0 $2.52 $11.73 1983 6 $0.30 $3.50 2012 0 $2.57 $11.73 1984 6 $0.39 $3.50 2013 0 $2.64 $12.60 1985 5 $0.45 $4.00 2014 0 $2.70 $14.67 1986 5 $0.57 $5.85 2015 0 $2.70 $16.77 1987 5 $0.59 $5.95 2016 0 $2.70 $41.57' 1968 5 $0.59 $5.95 2017 0 $2.70 32.49'# `Based on a 1 in meter " Based on a Staff Projections 36 MATERIALS SUBMITTED BY: Al Nederhood MEETING DATE: April 6,2017 (&) Yorba Linda Water District ANNUAL OPERATING BUDGET FISCAL YEAR 2016/17 Budget Calendar (Summary) DATE ITEM OF DISCUSSION FEBRUARY Disbursement of Departmental Budget Packets Salaries Budget Supplies & Services Budget (AII Departments) Operating revenues Reserve policy analysis Capital Improvement Projects budget (w/5 Year Cash Flow) MARCH Salaries Budget Supplies & Services Budget Operating revenues Reserve policy analysis Capital Improvement Projects budget (w/5 Year Cash Flow) Performance Measurements APRIL Operating revenues Reserve policy analysis Draft Capital Improvement Projects budget to Board of Directors Draft Department Budgets to Board of Directors Draft Authorized Positions and Labor/Benefits budget to Board of Directors MAY Final Requests for Strategic Plan Objectives/Goals JUNE Operating revenues (v 5.0) Adopt Reserve Policy Draft Financial Statements to Board of Directors JULY Final Budget Adoption by Resolution 49 MATERIALS SUBMITTED BY: Al Nederhood MEETING DATE: April 6,2017 �lI YORBA LINDA WATER DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) June 30, 2016 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED): h. Accounts Receivable: The District extends credit to customers in the normal course of operations. Management has evaluated the accounts and believes they are all collectible. Management evaluates all accounts receivable and if it is determined that they are uncollectible they are written off as a bad debt expense. A charge of $66,391 was made to bad debt expense for the year ended June 30, 2016. i. Prepaid Expenses: Certain payments to vendors reflects costs or deposits applicable to future accounting periods and are recorded as prepaid items in the basic financial statements. j. Inventory: Inventory consists primarily of materials and supplies used in the construction and maintenance of the water and sewer systems and are stated at cost using the average-cost method on a first in, first out basis. k. Capital Assets: Capital assets acquired and/or constructed are capitalized at historical cost. District policy has set the capitalization threshold for reporting capital assets at $5,000. Contributed assets are recorded at estimated fair market value at the date of contribution. Upon retirement or other disposition of capital assets, the cost and related accumulated depreciation are removed from the respective balances and any gains or losses are recognized. Depreciation is recorded on the straight-line basis over the estimated useful lives of the assets as follows: Source of Supply 30 to 75 years Pumping Plant 20 to 40 years Water Treatment Plant 12 to 40 years Sewer Plant 5 to 60 years Transmission and Distribution Plant 10 to 40 years General Plant 3 to 40 years - 24 - MATERIALS SUBMITTED BY: Al Nederhood MEETING DATE: April 6,.207